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GST DAILY DOSE OF UPDATION BY CA PRADEEP JAIN
SECTION 104 INTEREST ON REFUND OF PRE-DEPOSIT:-
This section pertains to refund on mandatory pre-deposit made at first appellate authority and tribunal. This section states that where an amount deposited by the appellant under sub-section (6) of section 98 or under sub-section (9) of section 101 is required to be refunded consequent to any order of the First Appellate Authority or of the Appellate Tribunal, as the case may be, interest at the rate specified under section 50 shall be payable in respect of such refund from the date of payment of the amount till the date of refund of such amount. This provision is similar to present provisions contained in section 35FF of the Central Excise Act, 1944. It is pertinent to mention that the provisions of mandatory pre-deposit have been introduced in Central Excise and Service Tax Laws w.e.f. 06.08.2014 and so section 35FF was also amended so as to grant interest on refund of pre-deposit from the date of payment to the actual sanction of refund.
However, if prior to 06.08.2014, the provisions were different and not beneficial to the assessees. Section 35FF of the Central Excise Act, 1944 for the period prior to 06.08.2014 provided that in case of refund of pre-deposit, if the refund is not sanctioned to the assessee within 3 months from the date of receipt of refund application, the interest is to be paid to the assessee at prescribed rates from the date of receipt of such application till the date of refund of such duty. This provision created problem because the revenue authorities contend that no interest is payable as the refund is normally sanctioned within a period of 3 months from the date of receipt of refund application. It is also pertinent to mention that the amended section 35FF states that the amount of pre-deposit made prior to 06.08.2014 would be governed by old provisions. Moreover, it is also provided in section 179 of the Revised GST law that the pending refund claims are to be disposed of as per earlier laws. Hence, assessees may continue to face problems in claiming interest on refund of pre-deposit for period prior to 06.08.2014.
However, the provision regarding grant of interest on refund of mandatory pre-deposit from the date of payment as incorporated in the revised GST regime is highly appreciated by assessees.
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