Indirect Tax Case Alert on IGST Refund

The Hon’ble H.C of Delhi directed that assessee was entitled to statutory interest in case IGST refund on export of goods not credited to the  assesse account within 60 days from the date of receipt of application for refund.

 In the case of Raghav Ventures v. Commissioner of Delhi GST Sanjeev Sachdeva and Ravinder Dudeja, JJ. W.P.(C) No. 12209 of 2023, CM APPL. No. 47988 of 2023, (March 1, 2024)

 In the present case, Assessee was an exporter of mobile phones of various brands and accessories. Asseess exported mobile phones and accessories to Dubai, UAE on payment of IGST. Assessee furnished returns in GSTR-3B and also submitted application for total refund of IGST INR 2,44,75,410/- for the tax period December 2022, February 2023, March 2023 and May 2023 vide Form GST-RFD-01 and system generated acknowledgement were issued vide GST-RFD-02, acknowledging the receipt of refund applications. However, refund for the above tax period has been sanctioned and credited to the assesse account after 60 days from the date of application of refund but without interest. Assessee filed an application to the proper officer and praying for grant of interest @ 6% from the date of filing of refund application till the date of refund actually credited to the account of the assesse because refund credited to the assesse without interest even after expiry of sixty days from application of refund.

As per section 56 of the CGST Act, 2017 deals with interest on delayed refund. It provides that if any tax order to be refunded under section 54(5) is not refunded within 60 days from the date of receipt of application under section 56(1), interest at the rate of 6% 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 of such tax. In view of the above, assesse was entitled to statutory interest at the rate of 6% starting from the date immediately after the expiry of 60 days from the date of receipt of refund application till the date on which the refund is credited to the bank account of the assesse.