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Refund of interest on GST Refund of pre-deposit, Goods and Services Tax - GST |
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Refund of interest on GST Refund of pre-deposit |
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we received GST refund of pre-deposit but department did not give us interest on such refund now my concern is that how do i get interest on such refund ? Posts / Replies Showing Replies 1 to 23 of 23 Records Page: 1
Write a letter to the department seeking interest under section 115 read with section 56 of the Act. If it is rejected or not responded, you will have to file a writ petition before HC.
(i) Interest on pre-deposit is payable from the date of deposit with the Appellate Authority to the date of payment. Govt. Department has no right to retain your amount without any authority of law. The amount of pre-deposit was meant for availing right of appeal. It was subject to decision of the appeal. So why the department should retain the pre-deposit amount without payment of interest. ? You are strong on merits. (ii) First step is to write a letter to the Officer who has partly rejected refund claim. If the concerned officer does not listen to you, then meet the jurisdictional Commissioner. Even then if the problem is not solved, then Appeal has to be filed against the partly rejected refund claim. (iii) Refund Rejection Order/Sanction Order is an Adjudication Order/Order-in-Original. It is appealable to the Appellate Authority. It is afresh Order-in-Original.
can I file fresh refund application on GST Portal for Interest part only?
NO. Only filing an appeal is the option. I have dealt with such issue.
but how can i file appeal bcoz department processed my refund claim which i filed as an original application and i did not claim interest part in original refund application, only claim tax amount which was deposited as a pre deposit and department processed the same.
You should have disclosed full facts in your query dated 10.9.24 at the first instance.
appeal can be filed against refund order , where by interest has not been given against sactioned refunded amount , even if interest has not been claimed specifically in refund claim/application ..giving interest on any refundable amount is integrated machenism & bound to be given , if it is admissible ,
Interest should have been sanctioned by the refund sanctioning authority on its own. Interest is automatic. You can file appeal. There are case laws on this issue in your favour.
Appeal against refund sanction order. Interest is automatic. No issue if not applied for separately. Interest due from date of pre-deposit.
Dera Sir, Your query does not mention that the refund was made beyond the statutory period of 60 days from the date of application filed for refund. As per Sec. 56, the interest is payable for the delayed period after 60 days of the refund application filed. If the refund is made within 60 days no interest is payable. If you have paid interest at the time of pre-deposit, you can get interest so paid. If there is any violation of provisions in the grant of refund, you can demand, the refund authority in writing for the interest.
Sh. Kalleshamurthy Murthy Ji,: Section 56 talks of refund of tax. Pre-deposit is not a payment of tax. It is a pre-deposit for availing right of appeal though pre-deposit has been allowed to pay through Electronic Credit Account. Interest is refundable from the date of deposit. Pre-deposit is not a payment duty (now tax) but only a pre-deposit for availing right of appeal.---Hon'ble Supreme Court in the case of UOI Vs. Suvidhe Ltd. reported as 1996 (2) TMI 136 - BOMBAY HIGH COURT. Bombay High Court and upheld by the Supreme Court in 1996 (8) TMI 521 - SC ORDER.
It is also worthwhile to know the difference between the terms, 'pre-deposit' and 'deposit'.
The following judgement is worth reading though pertains to pre-GST era :-
Dear Learned Experts, As per Sec.115, the interest is payable from the date of deposit. But the interest rate is prescribed u/s 56 under the heading, -Interest on delayed refunds -when the appeal order favoured the appellant at 9%. Sec. 56 reads as under. 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 per cent. 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. So, the Appellant has to apply for a refund. The interest payable arises only after the expiry of 60 days after the receipt of the application. That is the interest rate comes into the picture only after the expiry of 60 days. There was no rate of interest fixed for regular payments. How can the rate of interest prescribed under this provision be applicable from the date of deposit? So, Sec.115 and Sec. 56 are contradictory provisions. The departmental authorities follow this provision. Is further appeal only the way to get the remedy?
Dear Sh.Murthy Ji, How Sections 115 and 56 are contradictory ? Have you perused the meaning and essence of 'deposit' explained by the Hon'ble Supreme Court ?
Interest allowable on Refund of Pre-Deposit paid for filing Appeal. Pl. Refer Delhi High Court Judgement in the case of MRF LTD. vs THE COMMISSIONER OF TRADE AND TAXES & ANR - 2018 (8) TMI 995 - DELHI HIGH COURT.
Respected Kasturi Sethi Ji, I am in line with the provisions under the GST Act. Sec. 115 states the interest rate on the deposit from the date of payment of pre-deposit as prescribed u/s 56. According to section 56, The interest rate is applicable from the date after the expiry of 60 days. We can't choose the interest rate directly.
Kalleshamurthy sir, On a plain reading of section 115 and 56, it appears that Sec 115 borrows only the rate of interest from sec 56. The period for which interest is calculated is specified in section 115 itself.
Learned Padmanathan KV Sir, I agree 100% with you. It is only for the discussion purpose where a litigation can be created in the legality perspective.
Sh. Kalleshamurthy Murthy Ji, Just for discussion sake Extract of FAQ dated 15.12.18 Q49. When will interest become payable in a refund claim? Ans. As per Section 56 of CGST Act, if any tax ordered to be refunded under section 54 (5) to any applicant is not refunded within sixty days from the date of receipt of application under section 54(1), interest at such rate not exceeding six per cent, 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. 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 per cent, 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. Where the claim relates to refund of pre-deposit made as per Section 107 or 112 of the GST Act, different provisions will apply for interest As per Section 115 of the GST Act, where an amount paid by the appellant under section 107(6) or section 112(8) is required to be refunded consequent to any order of the Appellate Authority or of the Appellate Tribunal, interest at the rate specified under section 56 shall be payable in respect of such refund from the date of payment of the amount till the date of refund of such amount. Thus, in cases of refund of pre-deposit amount, interest will have to be paid from the date of payment till the date of refund of the amount (and not from date of receipt of claim for such refund of pre-deposit)
Sh.Kalleshamurthy Murthy Ji, The department filed SLP on 10.12.2018 which is still pending decision with the Supreme Court Refund of pre-deposit — Interest on refund whether payable from date when appeal allowed ? The Supreme Court Bench comprising Hon’ble Mr. Justice S.A. Bobde and Hon’ble Mr. Justice Navin Sinha on 10-12-2018 issued notice in the Petition for Special Leave to Appeal (C) No. 31522 of 2018 filed by Commissioner of Trade and Taxes against the Judgment and Order dated 10-8-2018 of Delhi High Court in Writ Petition (C) No. 3118 of 2018 as reported in 2018 (19) G.S.T.L. 478 (Del.) (MRF Limited v. Commissioner of Trade and Taxes). While issuing the notice, the Supreme Court passed the following order : “Issue notice. Until further orders, the operation of the impugned judgment and order passed by the High Court shall remain stayed.” The Delhi High Court in its impugned order had held that since refund of pre-deposit became due and payable from the date when appeal was allowed, assessee was also entitled to interest calculable from the date such appeal was allowed. [Commissioner of Trade and Taxes v. MRF Limited - 2018 (12) TMI 592 - SC ORDER]
what is the rate of interest 6% or 9% ?
Dear Sir, In the cases of finality of appeal, the interest rate is applicable @9%. With regards. Page: 1 |
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