The GST Appellate Tribunal at Vijayawada held that Shapoorji Pallonji is entitled to 6% interest on refunds allowed in appeal, reckoned from sixty days after its original applications.

Where a refund rejected by the proper officer is later allowed in appeal, interest under Section 56 of the CGST Act, 2017 runs from the expiry of sixty days after the original refund application, even if the refund is paid within sixty days of the consequential application filed after the appellate order, the GST Appellate Tribunal (GSTAT), Vijayawada has held [Shapoorji Pallonji and Company Private Limited v. Commissioner of State Tax Andhra Pradesh, 2026-juristway.com-3432-GSTAT(Vijayawada)-GST].

The Bench of Bhaskar Reddy Vemireddy, Member (Judicial), who wrote the order, and Satish Agrawal, Member (Technical), allowed the appeals of the works contractor.

The company filed eight refund applications for inverted duty structure between January and March 2023, covering periods from December 2018 to March 2020. They were rejected with reference to Notification No. 15/2017-Central Tax (Rate). The first appellate authority allowed the claims on 23 Sep 2023, and the company filed consequential applications on 25 and 26 Sep 2023. The refunds were paid in November 2023, but interest was refused because payment was within sixty days of those applications.

Section 56 provides interest at up to 6% where a refund is not paid within sixty days of the application, and its proviso provides up to 9% where a refund arising from an appellate order is not paid within sixty days of the consequential application.

The Tribunal held that the consequential application only implements the appellate order and is not a fresh starting point for interest. Timely payment after the appeal does not extinguish ordinary interest that had already accrued. Rule 93, which deals with re-credit of amounts debited from the credit ledger, does not postpone the start of interest. It relied on Delhi High Court rulings in Lupin Limited, SBI Cards & Payment Services, Qualcomm India Private Limited, Bansal International and Altisource Business Solutions India.

It held that the Supreme Court’s ruling in Willowood Chemicals concerned the rate of interest, not the date from which it is reckoned. The proviso gives an enhanced 9% rate for the later period, and where the consequential refund is paid within sixty days, only the 6% ordinary rate applies.

The officer was directed to compute interest at 6% for each of the eight claims, from the day after sixty days from receipt of the original application to the date of payment, subject to the original applications being complete under Section 54 and Rule 89, within eight weeks of receipt of the order.

2026-juristway.com-3432-GSTAT(Vijayawada)-GST