Delhi High Court Allows Exporter To Approach GST Authorities For Interest On Refund

The Delhi High Court has permitted an exporter to approach the GST authorities for payment of interest on an allegedly delayed refund under Section 56 of the Central Goods and Services Tax Act, 2017.

The division bench of Justices Anil Kshetrapal and Shail Jain was hearing a petition filed by a lithium-ion battery recycler, which is engaged in the export of unwrought cobalt powder used in scrap batteries.

Petitioner submitted that it had applied on January 22, 2022, for refund of ₹31.44 lakh towards tax paid on export of goods. The refund application was rejected on April 22, 2024. However, the Appellate Authority allowed the Petitioner's appeal on January 6, 2026 and set aside the refund rejection order. Thereafter, Petitioner filed a fresh application on March 27, 2026, pursuant to which the refund amount was released.

The present petition sought pendent lite interest on the delayed refund in terms of Section 56 of the CGST Act.

Respondent's counsel however submitted that the Petitioner was required to first approach the Department for the relief sought.

Taking note of Section 56 of the CGST Act, the Court observed that the provision contemplates payment of interest where a refund ordered under Section 54(5) is not made within sixty days from the date of receipt of the refund application.

“The proviso thereto further provides for payment of interest where the claim for refund arises pursuant to an order passed by an Adjudicating Authority, Appellate Authority, Appellate Tribunal or Court, which has attained finality, and the refund is not made within sixty days from the date of receipt of the application filed consequent to such order,” it noted.

As such, the court granted liberty to the petitioner to approach the competent authority and directed that if an application is filed, it shall be considered.

For Petitioner: Advocates M.A. Ansari, Tabbassum Firdause and Md. Imran Ahmad.

For Respondents: Advocates Sumit K. Batra and Priyanka Jindal for GNCTD.