Interest payment month wise

[Asked by Guest]

Dear Sir, In case of supplementary invoice raised is interest required to pay month wise or days wise, please give us any reference regarding this, thanksand regards.

[Rajagopalan Ranganathan]

Sir,

For example if you had cleared excisable goods, say on 09.07.2013 adopting a price of ₹ 5.000/- you had to pay duty on ₹ 5,000/- on 5th or 6th of August 2013. If you got a price rise of ₹ 500/- in December 2013 you have to pay the differential duty on ₹ 500/-on 5th or 6th of January 2014. But you have to pay interest on ₹ 500/- from 6th or 7th of August 2013 as if you should have paid duty on ₹ 5,500/- on 5th or 6th of August, 2013.

The above view is based on the following judgments of Supreme Court of India.: -

1. CCE vs. SKF India Ltd.,-2009 (239) ELT 385 (S.C.).= 2009 (7) TMI 6 - SUPREME COURT

2. CCE vs. International Auto-2010 (250) ELT 3 (S.C.) = 2010 (1) TMI 151 - SUPREME COURT OF INDIA

 

Dear Sir, But calculation will be done how no of delayed months or no of days delayed, please explain, urgent required

[YAGAY and SUN]

Interest would be calculated on the basis of nos. of days.

[Rajagopalan Ranganathan]

Sir,

You calculate number of days of delay and divide it by 365. You will get delay in terms of year . Then apply the rate of interest. For example if delay in payment of duty is 260 days, then divide 260 days by 365 days (No. of days per year). It will be 0.71 year. Then calculate the interest amount by applying the prescribed rate.

AI Summary

Interest calculation on differential excise duty due from original clearance date; computed by days using a standard year basis.
Interest on additional duty from a supplementary invoice accrues from the original duty liability date; the differential amount is treated as though payable at the time of original clearance. Interest is calculated on a days basis by dividing the number of delayed days by the annual day count to obtain the fraction of a year, then applying the prescribed interest rate to the differential duty for that period.