Interest on delayed refunds
If any tax refundable 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 6%, as may be specified in the notification issued by the Central or a State Government on the recommendation of the GST Council shall be payable in respect of such refund from the date immediately after the expiry of the sixty days from date of receipt of application under section 54(1) till the date of refund of such tax – section 56 of CGST Act.
Interest sixty days after date of order in appeal, if refund was rejected – Where any order of refund arises from an order passed by an Adjudicating Authority, or Appellate Authority or Appellate Tribunal or any Court which has attained finality and the same is not refunded within 60 days from date of receipt of such application filed consequent to such order, interest at such rate not exceeding 9%, as may be specified in the notification issued by the Central or a State Government on the recommendation of the GST Council shall be payable in respect of such refund from the date immediately after the expiry of the sixty days from date of receipt of application – proviso to section 56 of CGST Act.
For the purposes of section 56, where any order of refund is made by an Appellate Authority, Appellate Tribunal or any court against an order of the proper officer under section 54(5) of CGST Act, the order passed by the Appellate Authority, Appellate Tribunal or by the court shall be deemed to be an order passed under the section 54 (5) – explanation to section 56 of CGST Act.
Interest only after order of Appellate Authority – If refund is rejected by adjudicating authority but sanctioned by appellate authority, interest will be payable sixty days after submission of application after receipt of order of appellate authority and not from date or order of adjudicating authority. This is highly unfair.