Skip to content

CA Final · Indirect Tax Laws · Refunds

Ananya Traders was sanctioned a refund, but the amount could not be credited because the bank account details given in its refund application were wrong. The company took 12 days to furnish the correct bank details and for validation of those details. Overall, the refund was paid 90 days after receipt of the application. Assuming no other period is excludable, for how many days is interest payable under section 56 read with rule 94?

Interest is payable for 18 days. The delay beyond sixty days is 30 days, and rule 94(2)(b) excludes the 12 days the applicant took to furnish and validate correct bank details, leaving 18 days on which interest at the notified rate is computed.

  1. A30 days
  2. B18 daysCorrect
  3. C42 days
  4. D12 days

Explanation

Rule 94(2)(b) excludes the time taken by the applicant to furnish correct bank details or validate them when the sanctioned refund could not be credited. Delay beyond 60 days = 90 - 60 = 30 days. Less the 12 days excluded, interest is payable for 30 - 12 = 18 days. Adding the 12 days gives 42 and is wrong in sign. Using only 12 days ignores the sixty-day free period.

Did you get it right without looking?

One question tells you little. A timed set on Refunds shows your real accuracy, how long you take and where you lose marks.

Practise RefundsFree diagnostic mock

More Refunds questions