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

Interest on pre-deposit: statutory deposit attracts interest from payment until refund, independent of the tax-refund timeline.
A pre deposit for filing an appeal is a statutory deposit, not tax; when the appeal succeeds the pre deposit must be refunded with interest from the date of payment until refund under the provision governing interest on pre deposits. The statutory timeline applicable to tax refunds addresses refunds of tax and does not supplant the independent rule requiring interest on pre deposits; a separate cross reference cited in the discussion is said to prescribe only the interest rate.