GST Authorities Have to Credit the Amount of GST Refund Within 60 Days

Do you know, that GST Authorities cannot take more than 60 days to credit the amount of refund from the date of receipt of the Application: High Court Positive order and Circular in the favor of Applicant?

The Delhi State government has issued the guidelines regarding the disposal of GST refund and payment of interest amount on delayed refund within a stipulated time period.

In a recent case of Lord Krishna Private Traders Limited vs. Commissioner of Delhi Goods and Services Tax, dated 20.05.2022, Delhi High Court issued an order to the DGST Commissioner to arrange a meeting with the petitioner and another practitioner to robust mechanism put in place for timely disposal of the case. A meeting regarding the same was held on 16th June 2022 and directions regarding the timely disposal of refund cases were issued and circulated to all stakeholders.

GST not refunded within 60 days

The disposal of refund applications in time bound manner is an integral part of the VAT / GST mechanism. As per Section 38 of the Delhi Value Added Tax Act, 2004 and Section 56 of the DGST Act 2017, any tax that is to be refunded under section 56(5), if not refunded within 60 days of the receipt of the application, interest at such rate not exceeding 6% as may be specified in the notification issued by the Government, shall be payable in respect of such refunds from the next day of the 60th day of the receipt of application. As per Section 42 of the Delhi Value Added Tax Act, 2004 interest is liable to be paid on delayed refunds. Therefore, it is the responsibility of the concerned authority to deposit the refund within a stipulated time period to avoid the interest on the refund amount.

Government of NCT of Delhi, Department of Trade and Taxes, issued the circular [Circular No. F.3(433)/GST/Policy/2022/1268-77, dated May 13, 2022] regarding the grievances redressal mechanism in case of pending refund which states that “All Ward Incharge /Proper Officers/Zonal Incharge are hereby directed to adhere, to departmental guidelines issued by the department for timely disposal of all types of refunds and take utmost care to dispose of the refund application within the stipulated time period.

Non-compliance will invite stringent action”

Also, read more about GST Refund Issues.

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