Central Excise – interest on interest
As of now there is no interest on delayed payment of interest on Central Excise duty. If you are prepared to pay 13% interest, you can pay the interest any time you want. In fact if you pay off the duty, you can pay interest any time you want. But this “accommodation” as Audit would call it may not last long. The CAG in its latest report has pointed out that the provision to collect interest on delayed payment of interest does not exist in the Central Excise law and because of this, the defaulters enjoy an unintended benefit.
The ministry has replied that there are no provisions under the law and Audit’s objections are taken note of. So it will be only a matter of time, may be till next budget before these provisions will be inserted in the statute.