Section 56 of GST Act: Interest on delayed refunds

Amended and updated notes on section 56 of CGST Act, 2017. Detail discussion on provisions and rules related to interest on delayed refunds.

Amended and updated notes on section 56 of CGST Act, 2017. Detail discussion on provisions and rules related to interest on delayed refunds.

Chapter XI (Sections 5458) of the Central Goods and Services Tax Act, 2017 deals with the provisions related to refunds. Section 56 of CGST 2017 provides for interest on delayed refunds.

Recently, we have discussed in detail section 55 (Refund in certain cases) of CGST Act 2017. Today, we learn the provisions of section 56 of Central GST Act 2017.

Section 56 of the Central Goods and Services Tax Act, 2017 has been notified by the Ministry of Finance vide Notification No. 9/2017-Central Tax, G.S.R. 658(E), dated 28.06.2017. This notification was come into force from 1st July, 2017 i.e. the commencement date of section 56 is 1-7-2017.

Name of ActThe Central Goods and Services Tax Act 2017
Enacted byParliament of India
Administered byCentral Board of Indirect Taxes & Customs
Governing bodyGST Council
Number of Chapters21
Number of Sections174
You are reading:
Chapter No.XI
Chapter NameRefunds
Section No.56
Section NameInterest on delayed refunds
Updated 2024 EditionGST Law Book PDF

Relevant Rules and Forms for GST Section 56:

  • Rule 94: Order sanctioning interest on delayed refunds
    • FORM-GST-RFD-05: Payment Order

Section 56 of Central GST – Interest on delayed refunds1

Section 56 of CGST Act 2017 shall come into force on 01.07.2017 vide Notification No. 9/2017-Central Tax, G.S.R. 658(E), dated 28.06.2017.

If any tax ordered to be refunded under sub-section (5) of section 54 to any applicant is not refunded within sixty days from the date of receipt of application under subsection (1) of that section, interest at such rate not exceeding six per cent. as may be specified in the notification issued by the Government on the recommendations of the Council shall be payable in respect of such refund from the date immediately after the expiry of sixty days from the date of receipt of application under the said sub-section till the date of refund of such tax:

Provided that where any claim of refund arises from an order passed by an adjudicating authority or Appellate Authority or Appellate Tribunal or court which has attained finality and the same is not refunded within sixty days from the date of receipt of application filed consequent to such order, interest at such rate not exceeding nine per cent. as may be notified by the Government on the recommendations of the Council shall be payable in respect of such refund from the date immediately after the expiry of sixty days from the date of receipt of application till the date of refund.

Explanation: For the purposes of this section, where any order of refund is made by an Appellate Authority, Appellate Tribunal or any court against an order of the proper officer under sub-section (5) of section 54, the order passed by the Appellate Authority, Appellate Tribunal or by the court shall be deemed to be an order passed under the said sub-section (5).

The CG vide Notification No. 13/2017-Central Tax, G.S.R. 661(E) dated 28-06-2017 and Notification No. 10/2017-Union Territory Tax, G.S.R. 747(E) dated 30-06-2017 fixed the rate of interest from the 1st day of July, 2017 at 6% p.a. and 9% p.a. for the purposes of section 56 and proviso to section 56 of CGST Act 2017 respectively.

  1. Section 56 of CGST Act 2017 shall come into force on 01.07.2017 vide Notification No. 9/2017-Central Tax, G.S.R. 658(E), dated 28.06.2017. ↩︎


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