What are the interest rates applicable on delayed GST refunds?
- Interest on Delayed Refunds for Normal Taxpayers:
- For delayed refunds to normal taxpayers (excluding exporters claiming refund of the Integrated Goods and Services Tax or IGST), interest is payable if the refund is not disbursed within 60 days from the date of receipt of the refund application.
- Interest on Delayed Refunds for Exporters (IGST Refund):
- For exporters claiming refund of the IGST paid on exports, interest is payable if the refund is not disbursed within 7 days from the date of the acknowledgment of the refund application.
- Interest Rate:
- The interest rate for delayed refunds is determined as a percentage over the applicable reference rate. The interest rate was typically 6% p.a. over the applicable reference rate for normal taxpayers and 9% p.a. over the reference rate for exporters as of my last update.
It’s important to note that interest rates and timelines for delayed refunds may be revised by the government, and taxpayers should refer to the latest notifications issued by the Goods and Services Tax authorities for the most accurate and up-to-date information.
Taxpayers claiming refunds should ensure that they file refund applications accurately and promptly, and they should monitor the processing status on the GST portal. If there are delays beyond the stipulated timelines, interest becomes applicable, and taxpayers are entitled to claim interest along with the refunded amount. Consulting with GST professionals or referring to official GST notifications can provide the most current information on interest rates for delayed GST refunds.