54. Refund of tax.—(1) Any person claiming refund of any tax and interest, if any, paid on such tax
or any other amount paid by him, may make an application before the expiry of two years from the
relevant date in such form and manner as may be prescribed:
Provided that a registered person, claiming refund of any balance in the electronic cash ledger in
accordance with the provisions of sub-section (6) of section 49, may claim such refund in 3
[such from and]
manner as may be prescribed.
1. Ins. by Act 8 of 2023, s. 145 (w.e.f. 1-10-2023).
2. Ins. by Act 23 of 2019, s. 102 (w.e.f. 1-1-2020).
3. Subs. by Act 6 of 2022, s. 113, for “the return furnished under section 39 in such” (w.e.f. 1-10-2022).
54
(2) A specialised agency of the United Nations Organisation or any Multilateral Financial Institution
and Organisation notified under the United Nations (Privileges and Immunities) Act, 1947 (46 of 1947),
Consulate or Embassy of foreign countries or any other person or class of persons, as notified under
section 55, entitled to a refund of tax paid by it on inward supplies of goods or services or both, may
make an application for such refund, in such form and manner as may be prescribed, before the expiry of
1
[two years] from the last day of the quarter in which such supply was received.
(3) Subject to the provisions of sub-section (10), a registered person may claim refund of any
unutilised input tax credit at the end of any tax period:
Provided that no refund of unutilised input tax credit shall be allowed in cases other than––
(i) zero rated supplies made without payment of tax;
(ii) where the credit has accumulated on account of rate of tax on inputs being higher than the rate
of tax on output supplies (other than nil rated or fully exempt supplies), except supplies of goods or
services or both as may be notified by the Government on the recommendations of the Council:
Provided further that no refund of unutilised input tax credit shall be allowed in cases where the
goods exported out of India are subjected to export duty:
Provided also that no refund of input tax credit shall be allowed, if the supplier of goods or services or
both avails of drawback in respect of central tax or claims refund of the integrated tax paid on such
supplies.
(4) The application shall be accompanied by—
(a) such documentary evidence as may be prescribed to establish that a refund is due to the
applicant; and
(b) such documentary or other evidence (including the documents referred to in section 33) as the
applicant may furnish to establish that the amount of tax and interest, if any, paid on such tax or any
other amount paid in relation to which such refund is claimed was collected from, or paid by, him and
the incidence of such tax and interest had not been passed on to any other person:
Provided that where the amount claimed as refund is less than two lakh rupees, it shall not be
necessary for the applicant to furnish any documentary and other evidences but he may file a declaration,
based on the documentary or other evidences available with him, certifying that the incidence of such tax
and interest had not been passed on to any other person.
(5) If, on receipt of any such application, the proper officer is satisfied that the whole or part of the
amount claimed as refund is refundable, he may make an order accordingly and the amount so determined
shall be credited to the Fund referred to in section 57.
(6) Notwithstanding anything contained in sub-section (5), the proper officer may, in the case of any
claim for refund on account of zero-rated supply of goods or services or both made by registered persons,
other than such category of registered persons as may be notified by the Government on the
recommendations of the Council, refund on a provisional basis, ninety per cent. of the total amount so
claimed, 2***, in such manner and subject to such conditions, limitations and safeguards as may be
prescribed and thereafter make an order under sub-section (5) for final settlement of the refund claim after
due verification of documents furnished by the applicant.
(7) The proper officer shall issue the order under sub-section (5) within sixty days from the date of
receipt of application complete in all respects.
(8) Notwithstanding anything contained in sub-section (5), the refundable amount shall, instead of
being credited to the Fund, be paid to the applicant, if such amount is relatable to—
1. Subs. by Act 6 of 2022, s. 113, for “six months” (w.e.f. 1-10-2022).
2. Certain words omitted by Act 8 of 2023, s. 146 (w.e.f. 1-10-2023).
55
(a) refund of tax paid on 1
[export] of goods or services or both or on inputs or input services used
in making such 1
[exports];
(b) refund of unutilised input tax credit under sub-section (3);
(c) refund of tax paid on a supply which is not provided, either wholly or partially, and for which
invoice has not been issued, or where a refund voucher has been issued;
(d) refund of tax in pursuance of section 77;
(e) the tax and interest, if any, or any other amount paid by the applicant, if he had not passed on
the incidence of such tax and interest to any other person; or
(f) the tax or interest borne by such other class of applicants as the Government may, on the
recommendations of the Council, by notification, specify.
2
[(8A) The Government may disburse the refund of the State tax in such manner as may be prescribed.]
(9) Notwithstanding anything to the contrary contained in any judgment, decree, order or direction of
the Appellate Tribunal or any court or in any other provisions of this Act or the rules made thereunder or
in any other law for the time being in force, no refund shall be made except in accordance with the
provisions of sub-section (8).
(10) Where any refund is due 3*** to a registered person who has defaulted in furnishing any return
or who is required to pay any tax, interest or penalty, which has not been stayed by any court, Tribunal or
Appellate Authority by the specified date, the proper officer may—
(a) withhold payment of refund due until the said person has furnished the return or paid the tax,
interest or penalty, as the case may be;
(b) deduct from the refund due, any tax, interest, penalty, fee or any other amount which the
taxable person is liable to pay but which remains unpaid under this Act or under the existing law.
Explanation.––For the purposes of this sub-section, the expression “specified date” shall mean the
last date for filing an appeal under this Act.
(11) Where an order giving rise to a refund is the subject matter of an appeal or further proceedings or
where any other proceedings under this Act is pending and the Commissioner is of the opinion that grant of
such refund is likely to adversely affect the revenue in the said appeal or other proceedings on account of
malfeasance or fraud committed, he may, after giving the taxable person an opportunity of being heard,
withhold the refund till such time as he may determine.
(12) Where a refund is withheld under sub-section (11), the taxable person shall, notwithstanding
anything contained in section 56, be entitled to interest at such rate not exceeding six per cent. as may be
notified on the recommendations of the Council, if as a result of the appeal or further proceedings he
becomes entitled to refund.
(13) Notwithstanding anything to the contrary contained in this section, the amount of advance tax
deposited by a casual taxable person or a non-resident taxable person under sub-section (2) of section 27,
shall not be refunded unless such person has, in respect of the entire period for which the certificate of
registration granted to him had remained in force, furnished all the returns required under section 39.
(14) Notwithstanding anything contained in this section, no refund under sub-section (5) or sub-section (6)
shall be paid to an applicant, if the amount is less than one thousand rupees.
Explanation.—For the purposes of this section,––
1. Subs. by Act 31 of 2018, s. 23 for “zero-rated supplies” (w.e.f. 1-2-2019).
2. Ins. by Act 23 of 2019, s. 103 (w.e.f. 1-9-2019).
3. The words, brackets and figure “under sub-section (3)” omitted by Act 6 of 2022, s. 113 (w.e.f. 1-10-2022).
56
(1) “refund” includes refund of tax paid on zero-rated supplies of goods or services or both or on
inputs or input services used in making such zero-rated supplies, or refund of tax on the supply of
goods regarded as deemed exports, or refund of unutilised input tax credit as provided under subsection (3).
(2) “relevant date” means—
(a) in the case of goods exported out of India where a refund of tax paid is available in
respect of goods themselves or, as the case may be, the inputs or input services used in such
goods,––
(i) if the goods are exported by sea or air, the date on which the ship or the aircraft in
which such goods are loaded, leaves India; or
(ii) if the goods are exported by land, the date on which such goods pass the frontier; or
(iii) if the goods are exported by post, the date of despatch of goods by the Post Office
concerned to a place outside India;
(b) in the case of supply of goods regarded as deemed exports where a refund of tax paid is
available in respect of the goods, the date on which the return relating to such deemed exports is
furnished;
1
[(ba) in case of zero-rated supply of goods or services or both to a Special Economic Zone
developer or a Special Economic Zone unit where a refund of tax paid is available in respect of
such supplies themselves, or as the case may be, the inputs or input services used in such
supplies, the due date for furnishing of return under section 39 in respect of such supplies;]
(c) in the case of services exported out of India where a refund of tax paid is available in
respect of services themselves or, as the case may be, the inputs or input services used in such
services, the date of––
(i) receipt of payment in convertible foreign exchange, 2
[or in Indian rupees wherever
permitted by the Reserve Bank of India] where the supply of services had been completed
prior to the receipt of such payment; or
(ii) issue of invoice, where payment for the services had been received in advance prior to
the date of issue of the invoice;
(d) in case where the tax becomes refundable as a consequence of judgment, decree, order or
direction of the Appellate Authority, Appellate Tribunal or any court, the date of communication
of such judgment, decree, order or direction;
3
[(e) in the case of refund of unutilised input tax credit under clause (ii) of the first proviso
to sub-section (3), the due date for furnishing of return under section 39 for the period in which
such claim for refund arises;]
(f) in the case where tax is paid provisionally under this Act or the rules made thereunder, the date
of adjustment of tax after the final assessment thereof;
(g) in the case of a person, other than the supplier, the date of receipt of goods or services or
both by such person; and
(h) in any other case, the date of payment of tax.
55. Refund in certain cases.––The Government may, on the recommendations of the Council, by
notification, specify any specialised agency of the United Nations Organisation or any Multilateral
Financial Institution and Organisation notified under the United Nations (Privileges and Immunities)
1. Ins. by Act 6 of 2022, s. 113 (w.e.f. 1-10-2022).
2. Ins. by Act 31 of 2018, s. 23 (w.e.f. 1-2-2019).
3. Subs. by s. 23, ibid., for sub-clause (e) (w.e.f. 1-2-2019).
57
Act, 1947 (46 of 1947), Consulate or Embassy of foreign countries and any other person or class of
persons as may be specified in this behalf, who shall, subject to such conditions and restrictions as may be
prescribed, be entitled to claim a refund of taxes paid on the notified supplies of goods or services or both
received by them.
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).
57. Consumer Welfare Fund.—The Government shall constitute a Fund, to be called the Consumer
Welfare Fund and there shall be credited to the Fund,—
(a) the amount referred to in sub-section (5) of section 54;
(b) any income from investment of the amount credited to the Fund; and
(c) such other monies received by it,
in such manner as may be prescribed.
58. Utilisation of Fund.—(1) All sums credited to the Fund shall be utilised by the Government for
the welfare of the consumers in such manner as may be prescribed.
(2) The Government or the authority specified by it shall maintain proper and separate account and
other relevant records in relation to the Fund and prepare an annual statement of accounts in such form as
may be prescribed in consultation with the Comptroller and Auditor-General of India.