Interest on a delayed GST refund: when it starts and how to check it

If a refund is paid more than 60 days after you filed the complete application, interest of 6% a year is payable on the late amount for each day beyond those 60. The officer orders the interest together with the payment order for the refund, and it is credited to your bank account. CGST Act, section 56; CGST Rules, rule 94.

The example below is a refund of accumulated input tax credit (ITC) on exports of services under LUT. The same interest rules apply to other refund categories.

Which interest rate applies?

Situation	Rate	Interest runs
The officer orders a refund that is not paid within 60 days of the application	6% a year	From the end of those 60 days until the refund date
The refund arises from an order of an adjudicating or appellate authority, the Appellate Tribunal or a court that has become final, and is not paid within 60 days of the application filed after that order	9% a year	From the end of those 60 days until the refund date
The Commissioner withheld the refund under section 54(11) while an appeal or other proceedings were pending, and those proceedings entitle you to it	6% a year	From the date it was withheld until it is paid

Sources: section 56 and its proviso; section 54(11) and (12); rates in Notification 13/2017-Central Tax; the period for a withheld refund in the GST Council’s FAQs, refunds question 27.

Interest on tax paid late is 18% a year under section 50(1), set by the same notification. Practitioners have pointed out the gap: CA Akshit Singhal contrasted the 18% charged on late tax with the 6% paid on late refunds, and CA Ruchita Vaghani made the same comparison.

When does the 60-day count start?

The count starts on the date of filing of the complete application, not on the date the acknowledgement was issued. The acknowledgement, RFD-02, states that filing date. CGST Rules, rule 90(2).

After a deficiency memo (RFD-03) you file a fresh application, and its RFD-02 shows the filing date for that application. If you believe the memo was issued after the 15-day window or did not identify a real deficiency, have the start date reviewed before you accept a computation. The RFD-03 and RFD-08 guide explains the memo itself.

Which days are not counted?

Since 1 October 2023, rule 94(2) leaves these periods out of the delay:

• Time beyond 15 days after you receive an RFD-08 notice that you take to reply in RFD-09 or to submit further documents or a reply.
• Time you take to provide correct bank-account details, or to validate them, when the sanctioned refund could not be credited to the account you gave.

Notification 38/2023-Central Tax, clause 14.

Keep the documents that show each of these dates: RFD-02, any RFD-08 and your RFD-09 reply, and the bank credit.

Example: work out the interest

All figures are invented. Suppose:

• RFD-02 shows a filing date of 10 March 2026.
• An RFD-08 notice arrives on 1 April 2026, and you file the RFD-09 reply on 26 April 2026, 25 days later.
• A refund of ₹3,00,000 is credited on 18 June 2026. No provisional refund was paid.

Step	Days
10 March to 18 June 2026	100
Less the first 60 days	−60
Less reply time beyond 15 days of the RFD-08 (25 − 15)	−10
Days of delay	30

Interest: ₹3,00,000 × 6% × 30 ÷ 365 = ₹1,479, rounded to the nearest rupee.

Interest applies to the amount that was paid late. Rule 94 requires the order to state the amount of refund that was delayed. If ₹2,70,000 had been paid as a provisional refund within the 60 days, only the ₹30,000 balance was late: ₹30,000 × 6% × 30 ÷ 365 = ₹148.

This example uses a 365-day year. The officer’s order states the period and the amount actually computed. Compare it with your own working and ask about any difference.

Where do I find the interest?

Rule 94 requires the officer to make the interest order together with the payment order in RFD-05. The order states the amount of refund that was delayed, the period of delay and the interest payable. CGST Rules, rule 94.

On the GST portal, go to Services → Refunds → Track Application Status, open the application by its ARN and download its orders. A sanction order is not proof of payment. Check the bank credit separately, as the refund stages guide explains.

What if the interest is missing or wrong?

1. Recompute the delay from the RFD-02 filing date, the date of the bank credit and any excluded periods.
2. Write to the jurisdictional refund officer. Give the ARN, your computation and a reference to section 56 and rule 94, and keep a dated copy.
3. If you receive an order that refuses interest or allows less, note the date it was communicated. An appeal under section 107(1) must be filed within three months of that date. Have the remedy reviewed before the period ends.

The GST Council has recommended faster, system-based refund processing, which would shorten the time to a provisional refund once it applies. The recommendations do not change section 56; a separate recommendation concerns interest on refunds of pre-deposits paid for appeals. See the Council’s refund changes for service exporters.