interest payment-reg

[Ramakrishnan Seshadri]

Dear Sir,

We need a clarification. We have supplied mould to our vendor. At the time of mould supply the tool cost (amortisation cost) has not been finalised. The vendor has cleared the parts by paying excise duty without amortization cost. Now only the tool cost has been finalised. We have issued the po for the tool amortization cost for the supplies.The vendor has agreed to pay the excise duty for the tool amortization cost towards the quantity supplied by issuing supplimentary invoice. Our question is for this supplimentary invoice for the tool cost the interest has to be paid. who has to pay whether the vendor our ourself. Kindly clarify.

Thanks & Regards,

S.Ramakrishnan

[KASTURI SETHI]

SH.RAMAKRISHNAN SESHADRI,

An assessee who has paid CE duty on original invoice, will also pay differential duty on supplementary invoice. Who has paid short duty, will also pay interest.

[Rajagopalan Ranganathan]

Sir,

Amortization of mould cost is to be undertaken by your vendor. Initially he has not included the amortized cost of mould in the value of exciseable goods since tool cost was not finalised. On issue of PO by you after finalising the tool cost it is the duty of your vendor to amortize the cost and pay the differential duty and he has to issue the supplementary invoice to you. Interest for delayed payment of differential duty is also to be paid by your vendor.

[Ramakrishnan Seshadri]

Dear Sir,

Thank you experts for your reply. My another doubt is at what rate the excise duty has to be charged. For eg. at the time of clearing goods without tool cost the rate of duty may be 12.36%. But now the rate the excise duty is 12.5%. what rate i have to raise supplimentary invoice.

Kindly clarify.

Thanks & Regards,

S.Ramakrishnan.

[Kadayam Ganapathy Subramanian]

The duty rate adopted/prevailed on the date of original clearance of goods without adding mould amortization cost has to be considered in the supplementary invoice. In your case, at the time of original clearance of goods, the duty rate is 12.36%. You have to adopt that duty rate for paying the differential duty towards mould amortization cost on such goods.

K.G Subramanian

AI Summary

Differential excise duty liability: vendor must pay differential duty and interest; rate fixed at original clearance. Where mould amortization is finalized after original clearance, the vendor responsible for amortization must issue a supplementary invoice and pay the differential excise duty; the party who underpaid is liable for that differential duty and interest. The duty rate applied for computing the differential duty on the supplementary invoice is the rate in force on the date of the original clearance of the goods.