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CA Final · Indirect Tax Laws · Refunds

The proper officer has found interest due to an applicant under section 56 on a delayed refund. Which of the following correctly states what rule 94(1) requires the officer to do?

The officer must pass an order in FORM GST RFD-05 along with a payment order, stating the delayed refund amount, period of delay and interest payable. The interest is credited electronically to the applicant's bank account given in registration particulars and the refund application.

  1. AIssue an order in FORM GST RFD-05 with a payment order, specifying the delayed refund amount, the period of delay and the interest payable, which is credited electronically to a bank account of the applicant mentioned in registration particulars and specified in the refund applicationCorrect
  2. BIssue a notice in FORM GST RFD-08 asking the applicant to claim interest within fifteen days
  3. CWait for the applicant to file a separate appeal for interest, and then pay it in cash
  4. DCredit the interest to the electronic cash ledger of the applicant without any order

Explanation

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

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