Unfair Government
A former Joint Commissioner of Customs and Central Excise is highly agitated that;-
1. Unlike sec 28 AB of Customs Act, sec 18 (3) provides that the interest will be payable from “ the first day of the month in which the duty is provisionally assessed till the date of payment thereof ”. There appears to be an error here because interest liability cannot start from a date prior to the date when duty became payable. e.g. If provisional assessment is done on 30 th of a month say 30 th April, how can interest be demanded or collected for a period from 1 st April to 29 th April. This section needs to be in line with sec 28 AB which provides that interest is payable from “ the first day of the month succeeding the month in which the duty ought to have been paid”.
2. The interest rate for delayed payment of duty u/s 28 AB is 13% pa whereas u/s 47 it is 15% pa in terms of Notification Nos 76/03- cus (NT) dated 12-09-03 and 28/02- Cus (NT) dated 13-05-02 respectively. Why can't it be same either 13% or 15% for both the sections?
3. The Govt charges interest from the first day of the month in which provisional assessment had taken place in case duty is recoverable from the assessee, u/s 18(3) that too @ 13% pa whereas in case of refund to the assessee, the interest would be paid only after expiry of 3 months from the date of filing of refund u/s 18(4) and that too only @ 6%. This is highhandedness of the Govt and is against the principles of equity.
“I hope you will bring these facts to the knowledge of people through your esteemed site”, he says in his mail.
No equity sir; it's ‘heads I win; tails you lose'.
I asked a senior officer who was connected with this interest- ing issue as to why there should be dual rates – one for the assessee and one for the Government. He said it was to maintain equity and fair-play. Government can get money for even less than 6%, but for the assessee cost of borrowing would be around 13% or would have been 13% when the rate was fixed. If the rate of interest is fixed at 6% for the assessee, nobody would pay – it is as good as borrowing from government at 6%! And if the government was to pay 13% interest, it would amount to borrowing at more than double the available rate.