Order date: 05 Aug 2025 
Parties: Lupin Limited v. Union of India & Ors.

Facts -

• Petitioner, Lupin Limited, a pharmaceutical company, filed two refund applications for February 2022 (₹33.38 crore) and May 2022 (₹89.60 crore) under Section 54(1) of the CGST Act for ITC refund on exports without payment of tax.
• Original orders sanctioned partial refunds ₹4.32 crore (Feb 2022) and ₹12.21 crore (May 2022) and rejected the rest.
• On appeal, the Appellate Authority allowed full refund claims. Petitioner then sought interest for delayed refunds, claiming ₹6.29 crore computed at 6% from the 61st day after the original applications.
• Revenue contended interest should be calculated from the date of fresh applications filed post-appellate orders (May 2023), not the original refund application dates.

Issue -

• Whether interest on delayed refund under Section 56 of the CGST Act should be calculated from the date of the original refund applications or from the date of the fresh applications filed after appellate orders.

Order -

• The High Court held that Section 54 and Section 56 form a complete scheme for refund and interest. Interest is compensatory for delay beyond 60 days from application.
• Main provision of Section 56: 6% interest payable if refund is delayed beyond 60 days from the original application date.
• Proviso to Section 56: 9% interest payable if refund arises from an appellate/adjudicating authority’s final order and is delayed beyond 60 days from application filed pursuant to such order.
• The Court relied on the judgement of Delhi and Telangana High Court, and ordered that interest @9% shall be payable when the amount is not refunded within 60 days from the date of the order passed by the First Authority.