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Section 56 of the CGST Act, 2017

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GST›CGST Act, 2017›Chapter XI, Refunds

At a glance

Bars, duties and time limits

56 main limbFor a section 54(5) tax refund unpaid beyond sixty days from application receipt, interest runs until refund at the Council-recommended notified rate, capped at six per cent, in the prescribed manner and subject to prescribed conditions and restrictions.
56 provisoA refund claim arising from a final adjudicatory or appellate order attracts the separately notified rate, capped at nine per cent, after sixty days from receipt of the consequent application until refund.

Procedure, powers and definitions

56 ExplanationAn appellate or court refund order against a section 54(5) order is deemed an order under that sub-section.
56 provisoThe law does not settle when the relevant order attains finality.

Section 56 requires interest where an ordered tax refund remains unpaid beyond sixty days. The ordinary notified rate is capped at six per cent; the final-order proviso permits a notified rate up to nine per cent. Appellate refund orders are deemed section 54(5) orders. The section commenced on 1 July 2017, with revised computation wording from 1 October 2023.^[1]

Quick facts

Section 56, CGST Act, 2017

Interest on delayed refunds

Provision
Act	Central Goods and Services Tax Act, 2017
Chapter	XI, Refunds
Section title	Interest on delayed refunds
In force from	1 July 2017^[1]
Amendments
Last amendment	1 October 2023: substituted the closing words of the main limb, for the earlier words "from the date immediately after the expiry of sixty days from the date of receipt of application under the said sub-section till the date of refund of such tax" (s. 147 of The Finance Act 2023 (No. 8 of 2023))
Amendments	2 footnotes in the CBIC text (table)
Related provisions
Sections	54, 60
Structure the main limb of section 56The refund ordered and the sixty days the rate limbs of section 56The rate of interest the words substituted with effect from 1st October, 2023The period of delay and the prescribed manner the proviso to section 56A refund arising from an order which has attained finality the Explanation to section 56Orders of an Appellate Authority, Appellate Tribunal or court
Source
Law text	CBIC tax information portal, served on 17 September 2026^[1]
Questions reviewed	Prashant Prakash, 22 September 2026

Text

The text below is the section as served by the CBIC tax information portal on 17 September 2026, with the portal's own amendment footnote markers (shown as small numerals before a bracket) and its footnotes.^[1] The Act as published in the Gazette of India is the legal source.

Section 56, verbatim (show)

Section 56

* Section 56. Interest on delayed refunds.-

If any tax ordered to be refunded under sub-section (5) of section 54 to any applicant is not refunded within sixty days from the date of receipt of application under sub-section (1) of that section, interest at such rate not exceeding six per cent. as may be specified in the notification issued by the Government on the recommendations of the Council shall be payable in respect of such refund ¹[for the period of delay beyond sixty days from the date of receipt of such application till the date of refund of such tax, to be computed in such manner and subject to such conditions and restrictions as may be prescribed]:

Provided that where any claim of refund arises from an order passed by an adjudicating authority or Appellate Authority or Appellate Tribunal or court which has attained finality and the same is not refunded within sixty days from the date of receipt of application filed consequent to such order, interest at such rate not exceeding nine per cent. as may be notified by the Government on the recommendations of the Council shall be payable in respect of such refund from the date immediately after the expiry of sixty days from the date of receipt of application till the date of refund.

Explanation.-For the purposes of this section, where any order of refund is made by an Appellate Authority, Appellate Tribunal or any court against an order of the proper officer under sub-section (5) of section 54, the order passed by the Appellate Authority, Appellate Tribunal or by the court shall be deemed to be an order passed under the said sub-section (5).

*Enforced w.e.f. 1st July, 2017.

1. Substituted (w.e.f. 1st October, 2023 vide Notification No. 28/2023-C.T., dated 31st July, 2023.) by s. 147 of The Finance Act 2023 (No. 8 of 2023) for "from the date immediately after the expiry of sixty days from the date of receipt of application under the said sub-section till the date of refund of such tax".

Questions to answer on the file

Questions a reviewer answers from the engagement file, grouped by the part of the section they come from. They describe what the section asks; they do not decide it.

Scope the section as a whole

Questions to answer on the file1 question

What does the matter concern?

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The refund ordered and the sixty days the main limb of section 56

Questions to answer on the file5 questions

Has tax been ordered to be refunded to the applicant under sub-section (5) of section 54?
What is the date of receipt of the application under sub-section (1) of section 54?
Has the tax ordered to be refunded been refunded?
If so: what is the date of refund of the tax?
Was the tax refunded within sixty days from the date of receipt of the application?

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The rate of interest the rate limbs of section 56

Questions to answer on the file2 questions

Has the Government, on the recommendations of the Council, specified a rate by notification for a refund of this kind?
Under which rate limb does the interest on this refund fall: the rate not exceeding six per cent. specified in the notification issued under the main limb or the rate not exceeding nine per cent. notified under the proviso?

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The period of delay and the prescribed manner the words substituted with effect from 1st October, 2023

Questions to answer on the file3 questions

What is the period of delay beyond sixty days from the date of receipt of the application till the date of refund of the tax?
Has the manner of computing the interest been prescribed for a refund under this section?
If so: have the conditions and restrictions prescribed for the interest been satisfied?

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A refund arising from an order which has attained finality the proviso to section 56

Questions to answer on the file5 questions

Does the claim of refund arise from an order passed by an adjudicating authority, Appellate Authority, Appellate Tribunal or court?
If so: which of them passed the order the claim arises from: an adjudicating authority, an Appellate Authority, an Appellate Tribunal or a court?
Has that order attained finality?
What is the date of receipt of the application filed consequent to that order?
Was the refund made within sixty days from the date of receipt of that application?

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Orders of an Appellate Authority, Appellate Tribunal or court the Explanation to section 56

Questions to answer on the file2 questions

By whom was the order of refund relied on made: the proper officer under sub-section (5) of section 54, an Appellate Authority, an Appellate Tribunal or any court?
If “an Appellate Authority”, “an Appellate Tribunal” or “any court”: was that order made against an order of the proper officer under sub-section (5) of section 54?

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Amendment history

The CBIC text carries 2 footnotes. The table gives each in the source's own terms. Effective dates are as the footnotes state them.^[1]

Amendments to section 56 as footnoted in the CBIC text
Note	Change	Instrument	Effective from
	records the commencement of the section; it does not change its words	the notification enforcing the section	w.e.f. 1st July, 2017
1	substituted the closing words of the main limb, for the earlier words "from the date immediately after the expiry of sixty days from the date of receipt of application under the said sub-section till the date of refund of such tax"	s. 147 of The Finance Act 2023 (No. 8 of 2023)^[2]^[3]	w.e.f. 1st October, 2023, vide Notification No. 28/2023-C.T., dated 31st July, 2023

Provisions connected to Section 56
Provision	Connection	Words that tie them
Section 54	this provision requires sub-section (5) of Section 54	56 "If any tax ordered to be refunded under sub-section (5) of section 54 to any applicant"
Section 54	this provision requires sub-section (1) of Section 54	56 "from the date of receipt of application under sub-section (1) of that section"

Circulars and notifications

Circulars and notifications in the CBIC repository that cite this section, newest first, by number, date and subject. A listing here does not say what an instrument decides; read the instrument.

Circulars (2)

Number	Date	Subject
Circular No. 125/44/2019-GST	18 November 2019	Seeks to clarify the fully electronic refund process through FORM GST RFD-01 and single disbursement. amended by a later instrument
Circular No. 79/53/2018-GST	31 December 2018	Clarification on refund related issues. Rescinded vide Circular No. 125/44/2019 - GST dated 18.11.2019. rescinded by a later instrument

Notifications (5)

Number	Date	Subject
Notification No. 15/2017-Central Tax	1 July 2017	Amending CGST Rules notification 10/2017-CT dt 28.06.2017
Notification No. 10/2017-Union Territory Tax	30 June 2017	Notifies Fixing of rate of interest per annum amended by a later instrument
Notification No. 10/2017-Central Tax	28 June 2017	Seeks to amend CGST Rules notification no 3/2017-Central Tax dt 19.06.2017 amended by a later instrument
Notification No. 13/2017-Central Tax	28 June 2017	Seeks to prescribe rate of interest under CGST Act, 2017 amended by a later instrument made under this section
Notification No. 06/2017-Integrated Tax	28 June 2017	Seeks to prescribe rate of interest under CGST Act, 2017 amended by a later instrument made under this section

Unsettled questions

The words of section 56 do not answer this question. Where one decides a matter on the file, the answer depends on the position taken on it.

What makes an order of an adjudicating authority, Appellate Authority, Appellate Tribunal or court attain finality for the purposes of the proviso?

See also

Section 54 of the CGST Act, 2017: refund of tax
Section 60 of the CGST Act, 2017: provisional assessment

References

Central Board of Indirect Taxes and Customs. "Section 56. Interest on delayed refunds". Central Goods and Services Tax Act, 2017, CBIC tax information portal, with amendment footnotes 1 to 2. Retrieved 17 September 2026.
The Finance Act, 2023. Cited in CBIC footnote 1.
Notification No. 28/2023-Central Tax, dated 31 July 2023: Seeks to notify the provisions of sections 137 to 162 of the Finance Act, 2023 (8 of 2023). Cited in CBIC footnote 1.

External links

CGST Act, 2017, Section 56 on the CBIC tax information portal