Interest on unutilised cash balance

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This query is : Resolved

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A client wrongly deposited late fees as penalty and received a refund in FY 19-20. They failed to debit their cash ledger via DRC-03 and only rectified this in May 2022. The query asks whether interest is applicable on this unutilised cash balance from FY 19-20 until May 2022, and requests the relevant GST provisions and section numbers for the GST department.

Sonnal Khandaray

Sonnal Khandaray (Querist)
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25 May 2022 Hi All

One of my clients has wrongly deposited late fees in the coloumn of penalty and got refund of the same from the department in FY 19-20. He forgot to debit cash ledger balance by filing DRC-03. Till May 2022, the balance is not utilised for any other liability. In may 2022, he has filed DRC 03 and set off the refund.
Whether interest will be applicable on unutilised cash balance (under penalty) from FY 19-20 to May 2022?
Pls mention the provision and section applicable.

Thanks in advance.