POT RULES - REVERSE CHARGE

[SARVESH BANSAL]

Dear Sir

We had received bill from transporter pertains to Dec 15 & Jan 16 and their payment is made on April 16. We are paying Service tax on GTA under reverse charge.

As we had liable to pay interest , in case of reverse charge point of taxation is date of payment. Further, in case payment is not made within a period of three months the point of taxation shall be the date immediately following period of three months.

My question is that Whether bill pertains to Jan 16 (date of Bill 15 Jan 16) is liable for interest ?

How to calculate interest ? and What is the rate of interest in this case whether is it 15% or 18%

AI Summary

Interest on reverse charge liabilities requires applying varying interest rates depending on delay and notification effective date.
Liability for service tax under reverse charge is determined by the point of taxation: payment date is the point, or if payment exceeds three months the point is the day after that period. Delay is calculated from bill date to payment date; days beyond the three month allowance attract interest. Notification No.13/2016 S.T. prescribes separate interest rates for collected-but-unpaid amounts and for other delays and comes into force on enactment, requiring apportionment of delay periods when rates change.