Reverse charge payment

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This query is : Resolved

Pankaj Arora (Querist)

11 January 2016
We have received a manpower bill for Rs. 1 Lac in September 2015.

I have following queries regarding this:-

1) if we pay above bill in the month of December than from which date our liability will start and if we don't pay than from which date interest on late deposit service tax start?

2) if we pay after six months than how we will record liability in our books?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

11 January 2016 1 your liability will start from the date of payment. Interest will start from 6th January.
2 You can record the liability as soon as invoice is received and make payment after 6 months.

Ashish Chaudhary

Ashish Chaudhary (Expert)

14 January 2016 As I understand, the case is where liability is under RCM on the service receiver. Answer is as follows:
1. If payment is not made to vendor within 3 months from the DATE OF INVOICE, point of taxation would arise 1st day after expiry of 3 months. For delay in payment of ST beyond this point, interest liability would arise. Say if bill is dated 15th Sept and payment not made till 14th Dec, POT would fall on 15th Dec. Any delay in payment of ST beyond this point would carry interest cost
2. Treatment would be as per above if paid after six months. Earlier provision of six month has been amended

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