GST applicable if Differential Invoice is issued for ExtraBunker Surcharge for Export

[Malay pota]

The Matter is under:

A Limited ( the Company) exports their products to various Countries in Containers.The Company books containers through freight forwarders. X shipping and Logistics (XSL) is one of the various forwarders of the Company.From June 2018 to December 2018 the Company had booked about 60 containers through XSL.During this period due to hike in petrol and deisel price the shipping Companies were charging Extra Bunker Surcharg (EBS) @ USD 110 per 40 foot container.The Company was booking the Container in lots of 2 containers each time for export and XLS was issuing bill for 2x40ft cntainers each as and when the containers were booked and exported .XSL issued 30 invoices each for 2 containers making total 60 containers that was ok. XSL issued 30 invoices to the Company each for 2x40ft containers.Now in all the 30 invoice XSL through oversight shown EBS for 1x40ft container and XSL foregot EBS USD 110 for other conatiners.The Comapny paid all the invoices.Now XSL realised that they have not charges EBS USD 110 for other containers which should have been charged in the original invoices.XSL approched the Company and informed the facts.The Comapny acceptedand inform to issue invoices for differential amount. ie for USD 110x60 containers considering the exchange rate then applicable. Now the question is IGST is not applicable on EBS but does it become applicable on the EBS for which differential invoices as above is issued??

[KASTURI SETHI]

In my view, IGST is not applicable on the differential amount. As per Explanation to Section 31 of CGST Act given below sub-section 7, "tax invoice" shall include any revised invoice issued by the supplier in respect of a supply made earlier. Thus time of supply will remain the same i.e. that of original invoice . If no IGST is applicable at the time of raising original invoice, no IGST is applicable on the differential amount.The treatment of a revised invoice or a supplementary invoice would be similar to the treatment of a tax invoice (original invoice).

These are my views. Views of other experts are also solicited.

AI Summary

IGST on supplementary invoices: differential charges follow original time of supply, so IGST not payable on them. A revised or supplementary invoice is treated as a tax invoice under the Explanation to Section 31, so the time of supply remains that of the original invoice; consequently, if the original invoice did not attract IGST, the differential amount billed later will not attract IGST.