Service Tax - Supplementary Invoice - Whether Interest Payable

By Vijay Kumar

WHEN Supplementary invoice is raised at a later date, whether interest on service tax is to be paid on such supplementary invoices. The value enhancement which led to issue of supplementary invoice is not even known at the point of provision of service or while the initial invoice is raised.

This was a question raised in a recent meeting of the Regional Advisory Committee of the Chennai Service Tax Zone.

The Department replied:

Rule 6(4) of the Service Tax Rules, 1994 covers a similar situation and provides for payment of Service Tax on provisional basis subject to permission by the JAC/JDC and all the conditions of Rule 7 of the Central Excise Rules, 2002 are applicable to such provisional assessment. As laid down under Rule 7 of the Central Excise Rules, 2002 in case of differential Service Tax payment at later date, interest shall be automatic. Moreover, the point of taxation applicable to the original transaction equally applies to the supplementary invoice also. Therefore, it is viewed that interest is payable on the differential value collected under supplementary invoices.