GST Pre-Deposit Refund with Interest Key Ruling Explained
In a recent case, the GST Appellate Authority ordered the refund of ₹3.96 lakh—originally paid as pre-deposit—along with interest at 6% per annum.
This development clarifies the legal position on GST pre-deposit refund with interest, especially when the department loses the case. Here’s a simplified breakdown.
What Is a GST Pre-Deposit?
- Under Section 107(6) of the CGST Act, a taxpayer must pay:
- 100% of admitted tax liability (if any), and
- 10% of disputed tax amount (max ₹25 crore)
Key Facts of the Refund Case
- Taxpayer had deposited ₹3,96,000 as pre-deposit for appeal
- The case related to wrongly imposed penalties under Section 122
- On winning the appeal, taxpayer filed for refund of pre-deposit
- GST Appellate Authority ordered cash refund with 6% interest from the date of deposit
📌 Legal Reference:
Refund allowed as per Section 115 of the CGST Act read with Rule 158.
When Are You Eligible for Pre-Deposit Refund?
You can claim refund of pre-deposit if:
- You win your appeal (full or partial relief granted)
- You apply for refund within a reasonable time after order
Steps to Claim GST Pre-Deposit Refund
- Wait for certified copy of the Appellate Order
- File refund application in Form RFD-01 under “Excess Payment of Tax”
- Upload order copy and bank details
- Jurisdictional officer processes and issues RFD-06 sanction order
Expert Insight:
Many taxpayers think pre-deposits are lost if the appeal takes years.
Pro Tip: Always keep a record of pre-deposit challans (DRC-03) and appeal filings. These become crucial while claiming refunds later.
Why This Ruling Matters
- Clarifies cash refund is valid (not only re-credit in electronic ledger)
- Empowers taxpayers to legally assert refund rights post-appeal
GST Pre-Deposit vs Regular Tax Refund: Comparison Table
| Feature | Pre-Deposit Refund | Regular GST Refund |
|---|---|---|
| Paid under | Section 107(6) | Various (exports, ITC) |
| Refund eligibility | Post appeal win | After filing refund claim |
| Interest eligibility | Yes (if delay > 60 days) | Yes (varies by case) |
| Form for claim | RFD-01 | RFD-01 |
| Credited to | Bank account | Bank or Electronic Credit Ledger |
Related Efiletax Resources:
Final Thoughts
The GST pre-deposit refund with interest ruling offers a strong legal backing to honest taxpayers. If you’ve paid pre-deposit and won your appeal, don’t hesitate to file a refund claim. Even the interest is your legal right.
Let Efiletax handle your GST litigation and refund process smoothly — from appeal drafting to refund filing.
Summary
GST Appellate Authority approves ₹3.96 lakh pre-deposit refund with 6% interest. Know how to claim your GST pre-deposit refund after winning appeal.
FAQs
Q1. Is interest on pre-deposit refund automatic?
Yes, if refund is delayed beyond 60 days from application, interest @ 6% p.a. applies as per Section 56.
Q2. Can I claim pre-deposit refund as re-credit in ledger?
No. Refund of pre-deposit is usually given in cash to your bank account.
Q3. Is pre-deposit refundable if appeal is dismissed?
No. Refund is allowed only if you win the appeal or get relief in the order.
Q4. How do I track refund status?
Login to GST portal > Services > Refunds > Track Application Status.