Interest on delayed refunds Under GST (Happy gst series 09) by CA Rajender Arora
Section 56 of the CGST Act, 2017 read with Rule 94 of the CGST Rules, 2017 governs the
provisions for Interest on delayed refunds.
1. When liability arises to pay Interest on Refunds?
If any tax ordered to be refunded under sub-section (5) of section 54 to any applicant is not
refunded within sixty days from the date of receipt of application under sub-section (1) of that
section, the liability to pay interest arises. (If refund order is made and amount not paid shall
fall under this clause).
It is to be noted, where any order of refund is made by an Appellate Authority, Appellate
Tribunal or any court against an order of the proper officer under sub-section (5) of section 54,
the order passed by the Appellate Authority, Appellate Tribunal or by the court shall be deemed
to be an order passed under the said sub-section (5).
2. At what rate Interest shall be payable?
Rate of Intetrest on Refund
All orders under sub-section (5) of section
54 other than any claim of refund arises
from an order passed by an adjudicating
authority or Appellate Authority or Appellate
Tribunal or court which has attained finality.
6%
Any claim of refund arises from an
order passed by an adjudicating
authority or Appellate Authority or
Appellate Tribunal or court which has
attained finality.
9%
3. How interest is calculated?
Interest shall be paid from the date immediately after the expiry of sixty days from the date of
receipt of application under the said sub-section till the date of refund of such tax. (If refund
application filed on today so if refund not made till 60 days from today then interest to be
paid on period starting from 61 st day till actual day of refund).
4. How interest on refund is paid?
Where any interest is due and payable to the applicant under section 56, the proper officer
makes an order along with a payment order in FORM GST RFD-05, specifying therein the
amount of refund which is delayed, the period of delay for which interest is payable and the
amount of interest payable, and such amount of interest shall be electronically credited to any of
the bank accounts of the applicant mentioned in his registration particulars and as specified in
the application for refund.
#gst #interestondelayedrefundsundergst #refundsdelayedundergst #interestcalculatedundergst #formgstrfd05
