Interest rates and how to make reversal entries

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VAIBHAV (Querist)
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13 January 2012 Hiiiii,

My question is what are the interest rates for late payment reversal entries and wrong availment.

1/ Also please give me details how to make payment of interest duty and which heads.

2/ How to calculates interest payment.

Please advise.

Thanks

Bindu Binu

Bindu Binu (Expert)
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18 January 2012 1] The rate of interest is 18% p.a. w.e.f. 01.03.2011, for prior period the rate was 13% p.a.

2] You need to make payment against excise accounting code No. - 00380087 Misc Receipts for Excise

3] The service tax interest payment differs for each service.

4] First calculate the no. of delay days i.e. if the payment was due on 06/12/2011 and you have paid duty on 10/12/2011 Then the delay days shall be 3 days [i.e. 07/12 to 9/12].

Bindu Binu

Bindu Binu (Expert)
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18 January 2012 This is in continuation to my reply regarding caluclation of interst.

After calculating the no. of days you need to calculate the interest as under:

Duty amount x 18/100x No. of delay days / 365

I hope this will clear your doubts

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