payment of Interest on differential Excise Duty

[Pradeep Jain]

Dear Sir,

At the time of revision in the P.O. price by our Customer’s, we do pay differential excise duty . At the time of removal of finished goods, but we do not aware that how much price revision will be given by our customer on our claim . In this case is there any liability of interest on differential excise duty paid by us on the incre.mental value recovered from the customer.

We seek your opinion .

Regards

Pradeep Jain

[MUKUND THAKKAR]

Dear Pradeep jain

In case of any additional amount recover from customer which has connect to sales, In such case interest should be payable. generally this happened in case of your company act as a ancillary company of automobiles. rates are provisionally and latter on final. so according to me interest is payable on diff. duty.

[YAGAY andSUN]

Dear Pradeep,

It is settled legal position that interest is payable on differential excise duty payment to the exchequers. Whatever amount your client is getting as differential excise duty, that would come under the purview of payment of statutory interest at the applicable rate.

Regards

YAGAY and SUN

(Management, Business and Indirect Tax Consultants)

AI Summary

Interest on differential excise duty: recovery from customers does not remove liability to pay statutory interest to the exchequer. Whether interest is payable when a supplier pays differential excise duty at removal and later recovers incremental price from the customer; the commentary states that interest is payable on differential excise duty remitted to the exchequer and that recovery from customers does not eliminate the supplier's liability to statutory interest at the applicable rate.