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CMA Final · Indirect Tax Laws and Practice · Refund

Sunrise Traders Pvt Ltd deposited Rs 10,00,000 under section 129E to file an appeal after the 2014 amendment, and the appellate authority later ordered the deposit refunded. Under section 129EE, interest is payable on the deposit:

Interest runs from the date the pre-deposit was paid until the date it is refunded, at a rate notified by the Central Government within a floor of 5% and a ceiling of 36% per annum. It does not start only from the order date.

  1. AFrom the date of the appellate order until the date of refund, at a rate fixed by the Central Government
  2. BFrom the date of payment of the deposit until the date of refund, at a rate fixed by notification, not below 5% and not above 36% per annumCorrect
  3. CFrom the date of filing the appeal until the date of the order, at a fixed 6% per annum
  4. DOnly after three months from the appellate order, at 12% per annum

Explanation

Section 129EE gives interest on the amount deposited from the date of payment of the deposit until the date of refund, at a rate notified by the Central Government between 5% and 36% per annum. Option A wrongly starts from the date of the order.

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