Payment of service tax on reversed charge method -Reg

[vinay wakde]

As per the query raised by the Excise Auditor. we are paying service tax on reverse charged method on service catagory 'Banking and other financial service' and availing credit to avoid any litigation with Department. As per our knowledge the applicability of service tax on Bank charges (Remittance amount) w.e.f. 16.05.2008 and we have to pay service tax with interest w.e.f. 16.05.2008. 

Kindly confirm.

Regards,

VINAY

 

[YAGAY andSUN]

Yes, you have to pay service tax along with Interest (as applicable) w.e.f. 16.05.2008.

AI Summary

Service tax reverse charge requires payment with applicable interest from the notified effective date for banking services. Service Tax under the reverse charge mechanism applies to Banking and other financial services and is payable on bank charges (remittance amounts) with applicable interest from the effective date of 16.05.2008; availing input credit was used to address the liability but does not negate the obligation to pay tax and interest from that date.