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CA Final · Indirect Tax Laws · Refund

Under section 129EE of the Customs Act, 1962, Bharat Steels deposited Rs 20,00,000 under section 129E to file an appeal, and the appellate authority ordered the amount refunded. Which statement about interest is correct?

Interest on a refunded pre-deposit under section 129EE runs from the date the amount was paid until the date of refund, at a rate the Central Government fixes by notification, not below five and not above thirty-six per cent per annum.

  1. AInterest is payable from the date of the appellate order until refund
  2. BInterest is payable on the amount from the date of payment of the deposit till the date of refund, at a rate fixed by the Central Government between five and thirty-six per cent per annumCorrect
  3. CInterest is payable only if refund is delayed beyond three months of the order
  4. DNo interest is payable on pre-deposits

Explanation

Section 129EE provides interest at a rate not below five per cent and not exceeding thirty-six per cent per annum, as fixed by the Central Government by notification, on the amount from the date of payment till the date of refund. It runs from the deposit date, not from the order date, and has no three-month waiting condition.

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