Error in process of refund by department

I have Claimed refund from cash ledger which was rejected by department for not filing of monthly return. later on appellate has set aside rejection order. Due to non availability of online module for appeal effect I have filed rfd 01 again on 29/4/22. Now department has passed order in my favor but in place of rfd 05 they issued PMT 03. The refund is not credited in my account instead my credit ledger has credited with refund amount. Now the officer don't know how to correct the mistake. he said file DRC03 and reverse the credit. and for refund he says dekhte hai. My original application was of Jun 21 and its Jun 22 and the refund amount is 20 lakh.

what actions can be taken and am eligible for interest from which date.

Hi Namrata,

This is a tricky situation but not uncommon in GST refund cases. Here’s a detailed breakdown of your scenario and possible steps:

Your Situation Recap:

You claimed refund from cash ledger → rejected due to non-filing of monthly return.
Later, appellate authority set aside the rejection order.
Due to lack of online module to give effect to appeal, you filed RFD-01 again on 29/04/22.
Dept issued PMT-03 instead of RFD-05.
Refund amount was credited to your electronic credit ledger (not your bank account).
Officer suggests to file DRC-03 to reverse this credit.
Officer unsure about refund and says “dekhte hai” (will see).
Original refund claim was for June 2021, amount ₹20 lakh.

What does this mean?

PMT-03 is a credit note in electronic credit ledger (ECL), NOT an actual refund to bank.
You wanted refund to be paid to your bank account but it got wrongly credited to ECL.
Filing DRC-03 is needed to reverse this wrongly credited amount in ECL.
After reversal, a correct refund order with payment to bank needs to be issued.
Interest on delayed refund is generally payable from the date of application (RFD-01 filing) till refund is actually paid.

Actions you can take:

Get the DRC-03 filed immediately:
- The department should reverse the PMT-03 credit by DRC-03 so that ECL is not credited wrongly.
- This will put your refund claim back to pending/refund stage.
Request the department to issue correct refund order (RFD-05):
- Since the appellate order set aside the rejection, refund is due.
- You may need to provide a written request or reminder for this.
Follow-up escalation:
- If the local officer is confused or non-cooperative, escalate the matter to GST Commissioner or higher officer.
- You can also approach GST grievance portal or CGST Commissionerate.
Interest claim:
- Interest is generally payable u/s 56 of CGST Act.
- Interest period: From 60 days after filing of refund application till the date refund is paid.
- Since original application was June 2021 and refiled in April 2022, interest may be calculated from 60 days after June 2021 application date (or April 2022 if considered fresh application).
- You can claim interest for the delayed refund period along with your refund application.

Additional Tips:

Maintain all communications in writing and keep records of refund application dates, appellate order, etc.
Check your GST portal for refund status and ledger entries regularly.
Engage a GST consultant or legal expert if department officers are unable to resolve.