The “Punjab & Haryana High Court” in the case of Vinyl Tubes Pvt. Limited v. Union of India CWP No. 9863 of 2020, during hearing of the case, took notice that refunds in case of zero rated supplies are being delayed in number of cases for a considerable period of time; and when granted on the intervention of the Court, interest are not being given as per the CGST Act/Rules.
During the hearing, the Petitioner presented the plea before the Hon’ble Court, that the provision for the Interest (i.e. Section 56 of the CGST Act read with Rule 94 of the CGST Rules) are automatic as provided under GST law. The Authorities are bound to issue “Order Sanctioning Interest” along with the refund, if the refund is being issued beyond the mandatory time limit of 60 days (Section 54(7) of the CGST Act) from the date of receipt of the refund application.
Even in present case, the refund of IGST paid on exports of zero rated supplies made with payment of IGST, was pending for a considerable period of time and only because of the Hon’ble Court’s intervention, the refund was issued; however no interest on the delayed payment of refund was sanctioned.
The Hon’ble High Court, relegated the matter to the jurisdictional authority, and directed that the authorities that they shall consider the plea of the petitioner regarding payment of interest and pass a speaking order at the earliest, in any case, not later than six weeks.
The order of the Hon’ble Punjab & Haryana High Court can be read at: Order
The matter has been argued by Adv. Puneet Agrawal (Partner at ALA Legal Associates & Solicitors) and Adv. Yuvraj Singh (Manager at ALA Legal Associates & Solicitors)
Yuvraj is an advocate and has completed his B.A. LL.B(Hons) from RGNUL-Punjab. He is a practicing advocate and has been involved in matters pertaining to GST and other indirect taxes as well as Direct Tax. He is active in Writ Courts and has involvement in a few landmark judgments like Pitambra Books Pvt. Ltd. V. Union of India (W.P.C. No. 627 of 2020), and represented Sales Tax Bar Association (Delhi) to resolve GST issues and glitches.