INTEREST PAYMENT ON SUPPLEMENTARY INVOICE RAISED

[Guest]

Dear Sir,

Is interest payable on supplementary invoice raised on price revisions with retrospective effect, please clarify with any references regarding this,pls explain, thanks and regards.

[Mahir S]

Yes, interest is payable with retrospective effect on the supplementary invoices raised due to price revisions. Interest would be payable at 18 percent per annum from the date of issuing the initial/original invoice.

For ready reference on the said issue, refer the Supreme Court of India judgement in the matter of Commissioner of Central Excise, Pune Versus M/s SKF India Ltd.  2009 (7) TMI 6 - SUPREME COURT.

[YAGAY andSUN]

Dear Sandesh,

It is settled legal position that interest is payable on the issuance of Supplementary Invoices.

Regards,

Team YAGAY and SUN

(Management and Indirect Tax Consultants)

AI Summary

Interest on supplementary invoices must be paid from the original invoice date when price revisions apply retrospectively. Supplementary invoices issued for retrospective price revisions require payment of interest from the date of the original/initial invoice until payment; practice responses cite an applied rate of 18 percent per annum and refer to precedent indicating that issuing a supplementary invoice does not remove the obligation to compute and discharge interest on the resulting tax/levy differential.