Section 56 of CGST Act

Interest on delayed refunds

• Enforced with effect from 1-7-2017.

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,

interest at such rate not exceeding six percent as may be specified in the notification issued by the Government on the recommendations of the Council

shall be payable in respect of such refund 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 for the period of delay beyond 60 days from the date of receipt of such application till the date of refund of such tax, to be computed in such manner and subject to such conditions and restrictions as may be prescribed:

[Substituted by the Finance Act, 2023, w.e.f. 1-10-2023].

Provided that where 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 and the same is not refunded within sixty days from the date of receipt of application filed consequent to such order, interest at such rate not exceeding nine percent as may be notified by the Government on the recommendations of the Council shall be payable in respect of such refund from the date immediately after the expiry of sixty days from the date of receipt of application till the date of refund.

Explanation. –

For the purposes of this section, 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).

• See also –
• Rule 94 of the CGST Rules, 2017; and
• Rule 97 of the CGST Rules, 2017; and
• Form No. RFD-05 of the CGST Rules, 2017.

• For notified rate of interest under sections 50(1)/ (3), 54(12) and 56 and its proviso, see Notification No. 13/2017-Central Tax, dated 28-6-2017.

• For notified rates of interest on delayed payment of tax, see Notification No. 6/2017- Integrated Tax, dated 28-6-2017 and Notification No. 10/2017-Union Territory Tax, dated 30-6-2017.