Rahul Jain (Accountant) (316 Points)
29 November 2013A service recipient being a trading company received GTA service in June and September 2013.Bills were raised by GTA in june and september respectivey. Service recipient paid service amount in September and deposited service tax for june land september on 4th October.
Will the service recipient liable to pay Interest for delay in depositing ST since under reverse charge, service recipient is liable to deposit ST when it makes payment?
Manoj Agarwal
(Service Tax Consultant Rourkela ServiceTaxExpert@yahoo.com)
(3456 Points)
Replied 30 November 2013
You answer is within your question!!! In case of reverse charge, Rule 7 of Point of Taxation Rules, 2011 is applicable whereby date of payment is the point of taxation. Since you paid freight in september, the due date as per Rule 6(1) of STR, 1994 is 6th October (E-Payment). So, no need to pay interest. If the payment is not made within 6 months of date of invoice, then Rule 7 of POTR is not applicable and interest payable.
Rahul Jain
(Accountant)
(316 Points)
Replied 01 December 2013
Dear Sir, This was exactly my explanation to the Service Tax Inspector of my Range, but he says that I need to deposit Interest. What should tell him?
Manoj Agarwal
(Service Tax Consultant Rourkela ServiceTaxExpert@yahoo.com)
(3456 Points)
Replied 01 December 2013
You may contact the Range Superintendent and inform him. As per law, you are not liable to pay interest. The inspector may verbally ask you to pay penalty also in addition to the interest, but that's wrong. You may write a letter to the suprentendent explaining your legal position, without waiting for any notice.
LIVE Form 10 B and Form 10BB: Handle Tax Audit Reports of Charitable Organizations(with recording)
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