Section 56 – Interest on Delayed Refunds
Section 56 of CGST Act, 2017 – Interest on Delayed Refunds Updated on: February 2026 (as applicable till date) Prepared by: Yours Tax Consultant 1. Scope and Objective of Section 56 Section 56 provides for payment of interest to the taxpayer where refund sanctioned under GST is not paid within the prescribed time . This provision: Protects taxpayer’s liquidity Ensures accountability of tax administration Acts as compensation for delayed refunds 2. Statutory Provision – Section 56 Section 56: If any tax ordered to be refunded under section 54 is not refunded within sixty days from the date of receipt of application, interest at such rate, not exceeding 6% , as may be notified, shall be payable in respect of such refund from the date immediately after the expiry of sixty days till the date of refund of such tax. Proviso: Where any claim of refund arises from an order passed by an adjudicating authority or Appellate Authority or Court, which has a...