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CA Final · Indirect Tax Laws · Refunds

Shree Logistics Ltd's refund application is being processed. The proper officer sanctions interest on a delayed refund. Under rule 94(1), what must the proper officer's order in FORM GST RFD-05 specify, and how is the interest paid?

The RFD-05 order must state the delayed refund amount, the period of delay and the interest payable. The interest is credited electronically to a bank account of the applicant that is mentioned in registration particulars and specified in the refund application.

  1. AOnly the interest amount; it is adjusted against future tax liability
  2. BThe refund amount delayed, the period of delay and interest payable; interest is credited electronically to a bank account of the applicant mentioned in registration particulars and specified in the applicationCorrect
  3. CThe refund amount and the date of application; interest is paid by cheque to the applicant
  4. DThe period of delay only; interest is credited to the electronic cash ledger

Explanation

Rule 94(1) requires an order with a payment order in FORM GST RFD-05 specifying the amount of refund which is delayed, the period of delay for which interest is payable and the amount of interest payable. Interest is credited electronically to a bank account of the applicant mentioned in registration particulars and specified in the refund application. The other options misstate content or mode.

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