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CA Final · Indirect Tax Laws · Refunds

Tulsi Agro Ltd. applied for a refund on 1 March, received on that day (assume 60 days end on 30 April). The officer sanctioned the refund and issued it on 10 July, 71 days after 30 April. The notice in RFD-08 was received on 10 March and the applicant replied on 5 April, i.e. 26 days after receipt. Separately, the first credit failed because of wrong bank details, and the applicant took 6 days to furnish correct and validated details. Ignoring other factors, the number of days of delay for which interest is payable is:

The gross delay is 71 days. Rule 94(2) excludes the reply time beyond fifteen days, which is 11 days, and the 6 days taken to furnish correct bank details. Interest is therefore payable for 71 minus 11 minus 6, which equals 54 days.

  1. A54 daysCorrect
  2. B60 days
  3. C71 days
  4. D48 days

Explanation

Gross delay beyond sixty days is 71 days. Under rule 94(2)(a), time beyond fifteen days taken for reply is excluded: 26 minus 15 = 11 days. Under rule 94(2)(b), the 6 days taken for correct bank details are excluded. Net delay is 71 - 11 - 6 = 54 days. Option 71 ignores exclusions and 60 mistakenly excludes the whole 26-day reply time and 6 days... or ignores part; 48 excludes the full 26 days and 6 days (71-26-6 = 39 is not this), so it is a wrong computation.

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