2022 (11) TMI 674 - HC - GST

Entitlement to interest on delayed refund made - Zero Rated Supplies - Section 56 of the Goods and Services Tax Act, 2017 - HELD THAT - When the authorities have already paid refund amount, as per the interest aspect is concerned, the court is of the view that the petitioner could make appropriate application since grant of interest is contemplated under the statute, before the Goods and Services Tax Authority putting forth his claim for interest on the refund. If such application is made within 15 days from today, the competent authority shall consider it in accordance with law to decide the same regarding grant of interest to the petitioner within six weeks from the date of receipt of such application. Petition disposed off.

Summary

Issues:
1. Refund of Integrated Goods And Service Tax
2. Withholding of refund and duty drawback
3. Claim for interest on delayed refund

Refund of Integrated Goods And Service Tax:
The petitioner, a partnership firm, filed a petition stating that it had exported goods between November 2019 and June 2020 and was eligible for a refund of Integrated Goods And Service Tax (IGST) as per the provisions of the Act. The petitioner claimed that the refund of Rs. 1,31,89,893/- and Rs. 6,98,991/- towards duty drawback was withheld by the authorities. However, during the hearing, the petitioner's advocate informed the court that the principal prayer for the refund of IGST had been fulfilled as the petitioner had received the refund amount in full.

Withholding of refund and duty drawback:
Despite the refund of IGST being granted, the petitioner pressed for the claim of interest on the delayed refund. The advocate referred to Section 56 of the Goods and Services Tax Act, 2017, which deals with interest on delayed payments. The section specifies that if a tax refund is not paid within sixty days of the application, interest is payable on the refund amount. The court noted that since the authorities had already paid the refund, the petitioner could apply for interest as per the statute by submitting an appropriate application to the Goods and Services Tax Authority within 15 days from the judgment date. The competent authority was directed to consider the application and decide on the grant of interest to the petitioner within six weeks from the receipt of the application.

Claim for interest on delayed refund:
The court emphasized that the petitioner could seek interest on the refund amount by following the statutory procedure and submitting an application to the competent authority. The judgment disposed of the petition with the directive for the petitioner to apply for interest within the specified timeline, ensuring the competent authority's consideration and decision on the interest claim within six weeks.