Refund arising from an assessment, appeal or any other order
You won. The money does not come back on its own, and the clock is already running.
Where an amount becomes refundable as a consequence of an order of an adjudicating authority, appellate authority, Tribunal or court, the refund must be claimed under Section 54, and the relevant date for the two year period is the date of communication of that order. Interest under the proviso to Section 56 applies at the higher notified rate where the refund is delayed beyond sixty days from the application made pursuant to the order.
The three failures
Waiting for the department to act. A favourable order does not trigger an automatic refund. The application must be filed.
Letting limitation run. The two year period runs from communication of the order, and a taxpayer waiting to see whether the department appeals can lose the claim entirely.
Not claiming interest. The higher rate under the proviso to Section 56 applies to this category, and it is not paid unless computed and claimed.
How to file
Annex the order, the original payment challans, the ledger extracts and a computation reconciling the order to the amount claimed.
Where the order is partly favourable, compute and claim the refundable portion, and say expressly that the balance is under challenge.
Where a departmental appeal is pending, file the claim anyway. Withholding requires a recorded order under Section 54(11), and that order is itself reviewable.
Claim interest in the application with the computation.
What to do on Monday
File the refund application within weeks of a favourable order, not months.
Annex the order, the challans and a reconciliation computation.
Claim the higher rate of interest with a computation.
Where the refund is withheld, demand the Section 54(11) order in writing.
This page states the general position. A reader with a specific question on their own facts may write to the GST practice at AMLEGALS.
Write to the GST practiceQuestions we are asked on this
Should we wait for the department's appeal period?
No. File the claim; limitation runs from communication of the order in your favour.
Can the refund be withheld pending a departmental appeal?
Only under Section 54(11) on a recorded opinion. Ask for the order.
Which interest rate applies?
The higher rate under the proviso to Section 56 applies to refunds arising from an order. Verify the notified rate.
What if the order is partly in our favour?
Claim the refundable portion and record that the balance is under challenge.
Is a fresh application needed after a remand?
A remand usually results in a fresh order. File on the order that actually creates the refund entitlement.
In this cluster
- GST refunds: every category, every form, every deadline
- Export refunds: the LUT route versus the IGST route
- VKC Footsteps: why input service tax stays stuck in an inverted duty structure
- Provisional refund of ninety percent: the mechanism and how to keep it
- Replying to RFD-08: the refund rejection notice
- Deficiency memos in RFD-03 and the limitation reset problem
- Interest on delayed refunds under Section 56
- Unjust enrichment in GST refunds: when it applies, and when it does not
- Section 77: refund where tax was paid under the wrong head
- SEZ supplies and refund: endorsement, authorised operations and the disputes
GST Insights is published by AMLEGALS for general information. Law stated as on 3 September 2026. Not advice on any particular set of facts; not an advertisement or a solicitation under Rule 36 of the Bar Council of India Rules. Readers with a question on their own facts may write to the GST practice of their own accord.