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

Pre-deposit refunds attract interest from deposit date; 60-day tax refund limitation does not apply to statutory deposits An assessee challenged a departmental refusal to pay interest on refund of a pre-deposit made for filing a GST appeal, with the officer citing the 60-day refund rule. Forum replies state the pre-deposit is a statutory deposit, not 'tax,' so the provision governing tax refunds and the 60-day limitation does not apply. Instead, the specific provision for pre-deposit refunds requires payment of interest from the date of deposit until refund; the 60-day rule only governs tax refunds and the other provision merely fixes the interest rate.