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CA Final · Indirect Tax Laws · Refunds

Under rule 94(2)(b) of the CGST Rules, 2017, the refund sanctioned to Pragati Steels Ltd could not be credited because the bank account details furnished were incorrect. How is the time taken by the applicant to furnish correct details treated in computing the period of delay for interest?

Any time the applicant takes to furnish correct bank account details, or to validate them, where the sanctioned refund could not be credited, is excluded from the period of delay under rule 94(2)(b). Interest is therefore computed without that period.

  1. AIt is included, because delay is solely the department's responsibility
  2. BIt is excluded from the period of delay, being time taken by the applicant to furnish correct bank details or validate themCorrect
  3. CIt extinguishes the right to any interest under section 56
  4. DIt is included only if it exceeds sixty days

Explanation

Rule 94(2)(b) excludes any period taken by the applicant for furnishing correct bank account details or validating them where the sanctioned refund could not be credited. So it is not counted as delay. It does not forfeit interest for the remaining delay.

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