interest on supplimentary invoices.

[SANJEEV JADHAV]

Dear Sirs, recently we come to understand from audit  party that their is no need to pay interest on supplimentary invoices. Can we get notification / cirular / bill for the same.

[RAMESH PRAJAPATI]

Dear Mr Sanjeev,

It appears there is some confusion. If you raise supplimentary invoice to increase price of goods, you will have to pay excise duty alongwith interest. It has been confirmed by the Supreme Court of India in the matter of CCE vs SKF India Ltd  (2009 (7) TMI 6 - SUPREME COURT) = (2009 (239) ELT 385 (SC).

Thanks.

Ramesh

[YAGAY and SUN]

If additional excise duty or service tax is paid later, interest will become payable.  But, CENVAT credit of such interest will not be available.

AI Summary

Interest on supplementary invoices: interest is payable when excise or service tax is paid late and credit is disallowed.
When a supplementary invoice increases the taxable value, additional excise duty or service tax must be paid with interest on the belated payment; interest paid on such delayed payments is not eligible for Cenvat credit.