Interest on Supplementary on Volume Base Transaction.

[Santosh Mali]

Dear All,

Interest to be paid on supplementary invoice for rate difference is known. but if supplementary invoice prepared for volume base transaction then also "is it payable?"

e.g. If our customer gives me assurance for 50000 parts will be purchased every year and quotation of ₹ 10 given by us as per his assurance and a clause is mentioned in agreement that if he fails purchase less than 50000 qty. (say 40000) then the rate will be ₹ 12. and differential amount will be collected by issuing supplementary invoice, and further dispatch will continue by old rate i.e. ₹ 10. PLS GUIDE "IS INTEREST TO BE PAID ON SUCH TRANSACTIONS? " if yes then "WHY"

Regards,

Santosh

AI Summary

Interest on differential duty may arise for supplementary invoices in volume based price adjustments; legal position unsettled.
When a supplier issues a supplementary invoice to recover a price differential after goods were cleared at a lower price, the recovered amount is treated as differential duty arising from an earlier short payment; interest has been held payable on that differential as interest on delayed duty payment, but the legal position remains unsettled pending further authoritative determination.