Interest on delayed refunds
Section 56, CGST Act
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Section 56 pays interest if a sanctioned refund is delayed beyond 60 days from the application – up to 6% for ordinary delay, and up to 9% where the refund arises from a final appellate or court order that is not paid within 60 days.
What this means in practice
The parts that actually decide cases — the things a practitioner checks first.
Interest runs from the expiry of sixty days from the date of the APPLICATION, not from the date of the order – a refund sanctioned late still carries interest for the whole delay.
Six per cent for ordinary delay; nine per cent where the refund flows from an order of an appellate authority, tribunal or court that is not honoured within sixty days.
Interest has to be claimed and is sanctioned in RFD-05; the portal does not always compute it automatically, so ask for it in writing.
Questions people actually ask
Real questions we get on this provision, answered straight.
The department sanctioned our refund eight months after we applied but paid no interest.+
Interest under section 56 is automatic from the sixty-first day after the application at six per cent. Write to the sanctioning authority citing section 56 and Rule 94 and ask for an order in RFD-05; it is not a discretionary payment.
How this provision is built
The skeleton, clause by clause — useful when a notice cites a specific sub-clause.
The exact words of the law
1,635 characters, uneditedReproduced from the CBIC text. We explain it above — but you should always be able to read it yourself.
Read the full provision+
(5) of section 54 to any applicant is not refunded within sixty days from the date of receipt of application under sub-section
(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 1 [for the period of delay beyond sixty days from the date of receipt of such application till the date of refund of such tax, to be computed in such manner and subject to such conditions and restrictions as may be prescribed]: 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).
High Court cases on this section
Judgments in our index that cite this provision. Being listed does not make a case good law — it may have been appealed or distinguished since. Read it before relying on it.
What changed, and when
The amendment trail, newest first — because the version that applies to your case depends on the period.
2023-10-01 · Substituted
28/2023-C.T.
Substituted ( w.e.f. 1st October, 2023 vide Notification No. 28/2023-C.T. , dated 31st July, 2023. ) by s. 147 of The Finance Act 2023 (No. 8 of 2023) for " fro …
Where this comes from
Text reproduced from the Central Board of Indirect Taxes and Customs, as available on 2026-09-05. The explanation and practice notes above are GSTZone’s own, written for this hub. If you spot anything out of date, tell us and we’ll fix it — this hub is checked daily against CBIC.
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