Statutory interest under Section 56 GST Act is mandatorily payable on undisputed refund delayed beyond 60 days

Last updated: 23 October 2025

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The Gujarat High Court has ruled that statutory interest under Section 56 of the CGST Act is compulsory for any GST refund delayed beyond 60 days from the application date. This applies even if the delay is caused by technical system errors, provided the taxpayer is not at fault. The court emphasised that this interest is compensatory and automatically triggered by the expiry of the statutory timeline.

Court :
Gujarat High Court

Brief :
The Hon'ble Gujarat High Court in the case of Vineet Polyfab Pvt. Ltd. & Anr. v. Union of India & Ors. [R/Special Civil Application No. 17720 of 2024, order dated September 19, 2025] held that interest under Section 56 of the CGST Act is compulsory for delayed refunds exceeding 60 days from application, regardless of reason for delay, including technical errors in the GSTN-ICEGATE system, unless the taxpayer is at fault. The provision has a compensatory character and is triggered purely by the lapse of the statutory timeline.

Citation :
R/Special Civil Application No. 17720 of 2024, order dated September 19, 2025

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Attached File : 671907_5882_vineet_polyfab_pvt_ltd_and_anr.pdf

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Judgement posted by

Bimal Jain

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FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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