Interest on Delay Refund [section 56 or CGST Act & Rule 94/ 96C of CGST Rules]

Interest on Delayed GST Refunds Payable After 60 Days Under Sections 54(5), 56, 107(6), 112(8), and 115

Interest on delayed GST refunds under section 56 of the CGST Act is payable if the refund is not issued within 60 days from the receipt of the refund application. Interest on refunds ordered under section 54(5) is capped at 6% per annum, calculated from the day after the 60-day period until the refund date. For refunds arising from appellate or judicial orders, interest is payable at a rate not exceeding 9% per annum from the expiry of 60 days after the refund application is received. Interest orders must specify the refund amount, delay period, and interest payable, with interest credited electronically to the applicant's bank account. Periods during which the applicant delays responding to notices or providing valid bank details are excluded from delay calculations. Interest on pre-deposit refunds under sections 107(6) and 112(8) accrues from the date of payment until refund, per section 115. A recent court ruling confirmed interest accrues from the refund application date, not from the date of any court order.