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CA Final · Indirect Tax Laws · Refunds

Rajasthan Spices Ltd. is entitled to interest of ₹7,500 on a delayed refund. Under rule 94(1), how must the proper officer deal with this interest?

Under rule 94(1), the proper officer passes an order with a payment order in FORM GST RFD-05, stating the delayed refund amount, the period of delay and the interest payable. The interest is electronically credited to the applicant's bank account given in registration and in the refund application.

  1. APass an order with a payment order in FORM GST RFD-05 specifying the delayed refund amount, period of delay and interest, and credit it electronically to a bank account of the applicant mentioned in registration particulars and specified in the applicationCorrect
  2. BIssue FORM GST RFD-08 and wait for the applicant to claim interest by a separate application
  3. CCredit the interest to the electronic cash ledger of the applicant without any order
  4. DPay the interest by cheque to the applicant's authorised signatory at the officer's discretion

Explanation

Rule 94(1) requires an order along with a payment order in FORM GST RFD-05 specifying the amount of refund delayed, the period of delay and the interest payable. The interest is electronically credited to a bank account of the applicant mentioned in registration particulars and specified in the refund application. RFD-08 is a notice, not an interest order.

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