Delayed GST refund interest under Section 56 and impleadment of State GST authority for refund grievance

Interest on delayed GST refund was examined under Section 56 of the CGST Act, with the refund sanction orders indicating no delay attributable to the petitioner in processing the claim. On that basis, the petitioner was found prima facie entitled to statutory interest for the delayed period. Because the grievance also concerned non-grant of refund by the State GST Commissionerate, that authority was impleaded as a respondent for consideration of the refund-related issue. The Central GST was directed to examine the claim for interest and process it within two weeks, and to communicate reasons if interest was found not payable.

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Issues: Whether the petitioner was prima facie entitled to interest on the delayed refund under Section 56 of the Central Goods and Services Tax Act, 2017, and whether the State GST Commissionerate also required impleadment for consideration of the refund-related grievance.

Analysis: The refund sanction orders placed on record did not indicate any delay attributable to the petitioner in processing the refund claim. On that basis, the petitioner was found prima facie entitled to interest at the statutory rate for the delayed period. Since the grievance regarding non-grant of refund by the State GST Commissionerate was also raised, that authority was impleaded as a respondent and notice was issued.

Outcome: The respondent-Central GST was directed to consider the claim for interest and process it within two weeks, with reasons to be communicated if interest was found not payable, and the matter was renotified.

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