In cases where interest is made payable after the general credit period is over, such interest will not form part of the assessable value:

Example: Assessee charges `100/- per unit for his goods, if the payment is made within 45 days. `100/- per unit will of course include the interest component pertaining to the general credit period of 45 days. Even if the payment is made at the time of delivery `100/- would be the assessable value, irrespective of the possible inclusion of interest element in the price. If the assessee charges `102/- per unit after 45 days and `2/- per unit is identifiable as being relatable to time lag in payment, this amount of `2/- per unit will not form a part of the value. This is based on the decision of the Supreme Court in GOI vs MRF Ltd. 1995 (77) ELT 433.