INTEREST PAYMENT

[SNEHAL SHAH]

sIR,

Our one unit located at surat and now a days excise audit continue auditore raised point for some cenvate credit wrongly awailed -- Rs.1200000 ( twelves lacds ) before 31-03-2011 and Rs.500000 ( five lacs ) after 31-03-2011 . Please give effect of interst payemtn . Please give interest % how interst payment liable .

Regards,

SACHIN

 

[YAGAY andSUN]

Before budget interest was @ 13%  up-to 31-03-2011 and from 01-04-2011 interest is @ 18%.

[ROHAN THAKKAR]

 

Dear Sir,

It has been clarified vide circular No 942/03/2011-CX dated 14-03-2011 read with the Judgement of Supreme Court in the case of UOI v/s Ind-Swift Laboratories P Ltd  which clarifed that the interest is required to be paid from the date of wrong availment of cenvat credit till the date of actual payment.

The interest is required to be paid at 13% p.a till 31-03-2011 and from 01-04-2011, it is required to be paid at 18%. [Notification No 6/2011-CE(NT)

 

AI Summary

Interest on wrongly availed cenvat credit accrues from date of wrongful availment until payment; applicable rates change after budget. Interest on wrongly availed CENVAT credit is payable from the date of wrongful availment until actual payment; interest must be apportioned and computed at the pre budget rate for the period up to the budget effective date and at the post budget rate thereafter, and added to the principal for recovery.