Interest on gst penality refund

[Satbir singh wahi]

Sir eway bill minor error penality 699168 was levied by Gujrat Gst dept on 14.09.2023. Appeal was filed and now as per order 649168 credited on 15.07.2026 after deducting 50000 as penality. Whether interest for period 14.09.2023 to 15.07.2026 is available

[Raam Srinivasan Swaminathan Kalpathi]

Dear Querist

You are covered by Section 115 of the CGST Act, 2017. The said section provides

Interest on refund of amount paid for admission of appeal.

Where an amount paid by the appellant under sub-section (6) of section 107 or sub-section (8) of section 112 is required to be refunded consequent to any order of the Appellate Authority or of the Appellate Tribunal, interest at the rate specified under section 56 shall be payable in respect of such refund from the date of payment of the amount till the date of refund of such amount.

Kindly apply for interest on the refunded amount. Interest cannot be denied.

[Satbir singh wahi]

Thanks Sir

 

[KASTURI SETHI]

Yes. Section 115 is very much clear. No doubt.

[Satbir singh wahi]

Sir as assessee is in Punjab and appeal decided by Gujrat state appeals, Where and how to submit claim of interest, pls guide.

[Sanjeev Agarwal]

 Assuming the Gujarat Appellate Authority has allowed the appeal and the assessee is consequently entitled to refund:

• Refund application: File Form GST RFD-01 electronically on the GST portal with the Gujarat appellate order, original order, payment/DRC-03 details and refund computation. The fact that the assessee is now registered in Punjab does not by itself require a physical claim in Gujarat.
• Interest on appellate pre-deposit: If the amount was paid as pre-deposit under Section 107(6) and becomes refundable pursuant to the appellate order, Section 115 specifically provides for interest from the date of payment until the date of refund.
• Interest on other refundable amounts: Section 56 provides for interest where a refund arising from an Appellate Authority/Tribunal/Court order is not granted within 60 days from receipt of the refund application, subject to the prescribed rate.

Practical course

File RFD-01 with a separate interest calculation, clearly bifurcating:

1. Tax/amount refundable;
2. Appeal pre-deposit, if any;
3. Interest under Section 115 on the pre-deposit; and
4. Interest under Section 56, wherever applicable.

Also specifically request the proper officer to process the interest along with the principal refund and issue the corresponding refund order.

Important: The correct jurisdiction for processing the refund should be verified from the GST registration and the appellate order, particularly because the appeal was decided by Gujarat while the assessee is presently in Punjab. I would not recommend simply filing a separate physical "interest claim" before the Gujarat authority without first establishing the refund claim through RFD-01.

AI Summary

Interest on appellate pre-deposit applies from payment until refund when the amount becomes refundable under an appellate order.
Interest is payable from the date of payment to the date of refund where an amount paid as appellate pre-deposit becomes refundable following an appellate order. Form GST RFD-01 may be filed electronically with the relevant orders, payment details and a computation that separately identifies the refund, appellate pre-deposit and interest claimed. Interest on other appellate-order refunds may apply where the refund is delayed beyond the prescribed period after receipt of the refund application. Refund-processing jurisdiction should be verified before pursuing the claim.