Interest on refund of pre-deposit _Amount deposited for filing GST Appeals

[Aap Consulting Pvt. Ltd.]

Dear Experts

Please guide whether interest is payable by department on refund of pre-deposit once the assessees appeal is allowed. As per section 115 of the CGST Act, 2017 interest is payable from the date of payment till the date of refund; however the officer is of the view that as per section 56 of the Act, interest is payable only if the refund is given beyond a period of 60 days from the date of application of refund.

In my opinion this 60 days limit is only for 'any tax ordered to be refunded' or 'refund arising from an order passed by adjudicating authority'; however the amount deposited for filing Appeal u/s 107 is neither 'tax' nor 'arising from the order passed by Adjudicating Authority' it is an amount paid for admission of Appeal; hence section 56 of the Act is not applicable on this refund and interest is payable u/s 115 only.

AI Summary

Section 115 entitles taxpayer to interest on GST pre-deposit refunds, not limited by section 54's 60-day rule A party contested whether interest is payable on refund of a pre-deposit made under the GST appeal process. The pre-deposit for filing an appeal is a statutory deposit, not 'tax.' Section 115 entitles the taxpayer to interest on such pre-deposit from the date of payment until refund once the appeal is decided in their favor. Provisions like section 54 (and related 60-day delay rules) govern interest on tax refunds and do not apply to pre-deposits. Therefore interest should be paid under section 115 irrespective of the 60-day time limit in tax-refund provisions.