Section 115 of the Central Goods and Services Tax Act, 2017 deals with interest payable on the refund of an amount deposited by an appellant for admission of an appeal.
The provision is important because GST law requires an appellant to make a prescribed payment when filing certain appeals before the Appellate Authority or Appellate Tribunal. If that amount is subsequently required to be refunded because of an order passed by the Appellate Authority or Appellate Tribunal, Section 115 provides that the appellant is entitled not only to the refund of the amount but also to interest at the rate specified under Section 56.
The statutory provision specifically refers to amounts paid under Section 107(6) and Section 112(8). Therefore, Section 115 connects the appeal pre-deposit mechanism with the interest provisions applicable to refunds.
What Is Section 115 of the CGST Act?
Section 115 is titled:
“Interest on refund of amount paid for admission of appeal.”
The section provides that where an amount paid by the appellant under:
- Section 107(6), or
- Section 112(8)
is required to be refunded as a consequence of an order of the:
- Appellate Authority, or
- Appellate Tribunal,
interest at the rate specified under Section 56 is payable on that refund.
The interest is calculated from the date on which the amount was paid until the date on which the amount is refunded.
Why Is Section 115 Important?
GST appeals generally involve a statutory requirement to pay certain amounts before an appeal can be admitted.
This requirement is commonly referred to as a pre-deposit.
The purpose of the pre-deposit is different from a final determination that the disputed amount is actually payable. The amount paid for admission of an appeal can therefore become refundable if the appeal results in an order requiring such refund.
Section 115 provides protection to the appellant in such a situation by requiring interest on the refundable amount.
Therefore, the basic principle is:
Appeal pre-deposit → Refund becomes due → Interest is payable under Section 115
Which Payments Are Covered by Section 115?
Section 115 specifically covers amounts paid under:
Section 107(6)
Section 107 deals with appeals to the Appellate Authority.
Under Section 107(6), an appellant is required to pay:
- the admitted amount of tax, interest, fine, fee and penalty arising from the order; and
- a prescribed percentage of the disputed tax, subject to the statutory maximum.
The amount required under Section 107(6) is relevant for admission of the appeal.
Section 112(8)
Section 112 deals with appeals to the Appellate Tribunal.
Section 112(8) similarly requires the appellant to pay:
- the admitted amount of tax, interest, fine, fee and penalty arising from the impugned order; and
- the prescribed amount relating to the disputed tax, subject to the statutory limits.
Section 115 specifically refers to an amount paid under Section 112(8).
Section 115 Does Not Cover Every GST Refund
This is an important distinction.
Section 115 is specifically concerned with the refund of amounts paid for admission of an appeal under Sections 107(6) and 112(8).
It should therefore not be confused with the general GST refund mechanism under Section 54.
Section 54 is the broad refund provision covering different categories of GST refunds.
Section 115 specifically deals with interest on refund of appeal-related amounts covered by the section.
What Is a Pre-Deposit?
A pre-deposit is an amount that an appellant is required to pay as a condition for admission of an appeal.
The amount is connected with the statutory appeal mechanism.
It is not necessarily the final amount of tax that will remain payable after the appeal is decided.
For example, a taxpayer may dispute a GST demand and file an appeal.
To have the appeal admitted, the taxpayer may have to make the statutory payment required under Section 107(6).
If the appellate proceedings subsequently result in a refund becoming due in respect of that amount, Section 115 provides for interest on the refundable amount.
Section 115 and Section 107(6)
Section 107 provides the first appellate remedy under the CGST Act.
Section 107(6) establishes the payment requirement for admission of an appeal before the Appellate Authority.
Section 115 subsequently provides the interest mechanism when an amount paid under Section 107(6) is required to be refunded as a consequence of an appellate order.
This creates a direct connection between the two provisions:
Section 107(6) → Payment for admission of appeal
Section 115 → Interest when that amount is refunded
Section 115 and Section 112(8)
Section 112 deals with appeals to the Appellate Tribunal.
Section 112(8) establishes the payment requirement for admission of an appeal before the Appellate Tribunal.
Where an amount paid under Section 112(8) becomes refundable as a consequence of an order of the Appellate Tribunal, Section 115 provides interest on that refund.
Therefore:
Section 112(8) → Appellate Tribunal pre-deposit
Section 115 → Interest on refund of that amount
What Does “Consequent to Any Order” Mean?
Section 115 applies where the refund is required consequent to an order of the Appellate Authority or Appellate Tribunal.
The refund must therefore arise because of the appellate outcome.
For example, suppose a taxpayer makes a payment under Section 107(6) while filing an appeal.
The appeal is subsequently decided in a manner that results in the amount becoming refundable.
The refund is then connected with the appellate order, bringing the matter within Section 115.
Interest Is Linked to Section 56
Section 115 does not prescribe a separate percentage of interest.
Instead, it says that interest is payable at the rate specified under Section 56.
This is an important drafting feature of the provision.
Section 56 deals generally with interest on delayed refunds.
Under Section 56, where a refund ordered under Section 54(5) is not refunded within the statutory period, interest is payable at the notified rate, subject to the limits specified in that section. Section 56 also provides a higher ceiling for certain refunds arising from orders of an adjudicating authority, Appellate Authority, Appellate Tribunal or court that have attained finality.
For a Section 115 refund, the specific statutory rule is that the rate specified under Section 56 applies.
From Which Date Is Interest Calculated?
Section 115 contains a clear starting point.
Interest is payable:
from the date of payment of the amount
until:
the date of refund of that amount.
This is significant because the provision does not start the interest calculation from a general 60-day refund period.
Instead, Section 115 specifically identifies the payment date as the starting point for interest on the refundable appeal amount.
Example of Interest Calculation
Suppose a taxpayer pays an amount under Section 107(6) on 1 April.
The appellate proceedings subsequently result in the amount becoming refundable.
Suppose the refund is actually made on 1 October.
Under Section 115, the applicable interest is calculated for the period:
1 April → 1 October
at the rate specified under Section 56.
The exact interest amount depends on the amount refunded, the applicable notified rate and the relevant period.
Section 115 and Section 56 – Difference
Although Section 115 refers directly to Section 56, the two provisions serve different functions.
| Provision | Main purpose |
|---|---|
| Section 56 | Interest on delayed GST refunds |
| Section 115 | Interest on refund of certain appeal pre-deposits |
Section 115 effectively uses the rate specified under Section 56 for the particular refund covered by Section 115.
Is Interest Automatic Under Section 115?
The statutory provision states that interest shall be payable where the conditions of Section 115 are satisfied.
The essential requirements are:
- An amount was paid under Section 107(6) or Section 112(8).
- The amount is required to be refunded.
- The refund arises consequent to an order of the Appellate Authority or Appellate Tribunal.
- The refund relates to the amount covered by Section 115.
Where these conditions are met, the section provides for interest at the rate specified under Section 56.
Section 115 and the General Refund Procedure
The refund of an appeal pre-deposit is still connected with the GST refund framework.
The CGST Rules provide the procedure for refund applications and specifically refer to documentary evidence relating to amounts paid under Section 107(6) and Section 112(8).
Rule 89 requires relevant refund applications to be supported by the reference number of the order and other prescribed evidence, including the reference number of the payment of the amount specified under Section 107(6) or Section 112(8), as applicable.
This is important for taxpayers because the refund process requires the payment and appellate order to be properly identifiable.
Form GST RFD-01 and Appeal Pre-Deposit Refunds
The GST refund rules provide for electronic refund applications in FORM GST RFD-01 for applicable refund claims.
The refund rules specifically recognise claims arising from amounts paid under Section 107(6) and Section 112(8).
A taxpayer seeking such a refund should therefore maintain:
- the appellate order;
- proof of the pre-deposit;
- relevant appeal details;
- payment reference;
- refund application details; and
- other documents required under the applicable refund procedure.
Example – Refund of Section 107(6) Amount
Suppose a taxpayer receives an order creating a GST demand.
The taxpayer files an appeal before the Appellate Authority and makes the payment required under Section 107(6).
The Appellate Authority subsequently passes an order resulting in that amount becoming refundable.
The taxpayer can seek refund of the eligible amount.
Section 115 provides that interest at the rate specified under Section 56 is payable on that refund from the date of payment until the date of refund.
Example – Refund of Section 112(8) Amount
Suppose an appellant files an appeal before the Appellate Tribunal.
The appellant makes the amount required under Section 112(8).
The Appellate Tribunal subsequently passes an order resulting in the relevant amount becoming refundable.
Section 115 applies to the refund of the amount covered by the provision and provides interest at the rate specified under Section 56 from the date of payment until the date of refund.
Section 115 Does Not Decide the Appeal
Section 115 is not an appeal provision.
It does not determine:
- whether a GST demand is correct;
- whether tax is payable;
- whether ITC is admissible;
- whether a penalty should be imposed; or
- whether the appeal should succeed.
Those questions are decided under the relevant appellate provisions.
Section 115 deals specifically with the financial consequence relating to refund of certain appeal deposits.
👉 Read More → Section 116 – Appearance by authorised representative
Section 115 and Appellate Orders
The appellate order is important because Section 115 applies when the amount becomes refundable consequent to an order of the Appellate Authority or Appellate Tribunal.
Therefore, taxpayers should retain the relevant appellate order and payment records when claiming the refund.
The refund rules specifically require relevant documentary evidence for refund claims arising from appellate orders and appeal-related deposits.
Section 115 and Partial Refund
The wording of Section 115 refers to an amount that is required to be refunded.
Where only part of an appeal-related amount becomes refundable, the interest under Section 115 would correspond to the amount that is actually required to be refunded under the relevant appellate outcome.
The exact amount should therefore be determined from the appellate order and the applicable refund records.
Section 115 and Multiple Appeals
A business may have several GST appeals involving different demands and different pre-deposits.
Each appeal-related payment should be separately tracked.
Important records include:
- order number;
- appeal number;
- date of payment;
- amount deposited;
- appellate order date;
- refundable amount;
- refund application date; and
- date of actual refund.
Maintaining this information makes it easier to establish the amount and period for which interest is payable under Section 115.
Section 115 and Electronic GST Records
GST payments are recorded through the GST payment and ledger system.
The CGST Rules provide for the electronic cash ledger and electronic tax liability register. The payment rules also provide for transaction identification and related records.
For an appeal pre-deposit, the taxpayer should preserve the payment evidence and reference details so that the amount can be linked to the relevant appeal.
Difference Between Appeal Pre-Deposit and Final Tax Payment
A taxpayer should distinguish between:
Appeal Pre-Deposit
An amount paid to satisfy the statutory requirement for admission of an appeal.
Final Tax Payment
An amount paid towards a tax liability that is accepted or finally determined as payable.
Section 115 specifically deals with the refund and interest consequences of certain appeal-related payments, rather than every tax payment made by a taxpayer.
Section 115 and Section 54
| Basis | Section 54 | Section 115 |
|---|---|---|
| Main subject | General GST refund provision | Interest on refund of specified appeal amounts |
| Relevant payment | Various GST payments/eligible refund categories | Amount paid under Section 107(6) or 112(8) |
| Main connection | Refund entitlement and procedure | Interest on qualifying appeal pre-deposit refund |
| Interest provision | Section 56 | Section 56 rate applied through Section 115 |
| Trigger | Refund claim under applicable category | Refund consequent to appellate order |
The two provisions therefore operate together in appropriate cases but should not be treated as identical.
Section 115 and Section 56 – Practical Relationship
The relationship can be understood as follows:
Section 115 identifies the special refund situation.
Section 56 supplies the applicable interest rate.
Section 115 therefore does not need to establish a separate interest rate within the provision itself.
This drafting approach links the appeal-related refund interest to the broader GST refund-interest framework.
What Should a Taxpayer Keep for a Section 115 Refund?
A taxpayer should maintain:
- copy of the original demand/order;
- copy of the appeal;
- proof of payment under Section 107(6) or Section 112(8);
- payment reference number;
- copy of the appellate order;
- calculation of refundable amount;
- refund application;
- acknowledgement/reference of refund application;
- communication from the GST authorities; and
- proof of the actual refund.
These records help establish both the principal refund amount and the period relevant for interest calculation.
Practical Compliance Checklist
Before claiming a refund covered by Section 115, a taxpayer should verify:
Step 1 – Identify the Appeal
Confirm whether the payment was made under Section 107(6) or Section 112(8).
Step 2 – Check the Appellate Order
Read the appellate order carefully and determine whether the amount is required to be refunded.
Step 3 – Match the Payment
Match the refundable amount with the original payment record.
Step 4 – Determine the Interest Period
The statutory starting point under Section 115 is the date of payment, while the ending point is the date of refund.
Step 5 – Apply the Section 56 Rate
Calculate interest using the rate specified under Section 56 for the refund covered by Section 115.
Step 6 – File the Refund Claim
Follow the applicable GST refund procedure and submit the prescribed supporting documents.
Step 7 – Verify the Refund
After the refund is credited, verify both:
- principal amount; and
- interest amount.
Key Takeaways of Section 115
The most important points are:
- Section 115 deals with interest on refund of specified appeal-related amounts.
- It covers amounts paid under Section 107(6).
- It also covers amounts paid under Section 112(8).
- Section 107(6) relates to appeals before the Appellate Authority.
- Section 112(8) relates to appeals before the Appellate Tribunal.
- The amount must become refundable consequent to an order of the Appellate Authority or Appellate Tribunal.
- Interest is payable at the rate specified under Section 56.
- Interest is calculated from the date of payment of the amount.
- Interest continues until the date of refund.
- Section 115 is different from the general refund provision under Section 54.
- Section 115 does not determine whether an appeal succeeds.
- It deals with the interest consequence of refunding certain appeal deposits.
- GST refund rules provide for documentary evidence relating to payments under Sections 107(6) and 112(8).
- Taxpayers should preserve proof of payment and the relevant appellate order.
- Section 115 should be read with Sections 56, 107 and 112.
👉 Read More → Section 114 – Financial and administrative powers of President
Conclusion
Section 115 of the CGST Act provides an important financial safeguard for taxpayers who make statutory payments for admission of GST appeals.
Where an amount paid under Section 107(6) or Section 112(8) is required to be refunded as a consequence of an order of the Appellate Authority or Appellate Tribunal, Section 115 provides that interest is payable on the refundable amount at the rate specified under Section 56. The interest is calculated from the date of payment until the date of refund.
The provision creates a clear connection between the appeal pre-deposit system and the refund-interest mechanism. A taxpayer should therefore distinguish an appeal pre-deposit from an ordinary tax payment and maintain proper records showing the amount paid, the appeal to which it relates, the appellate order and the subsequent refund.
The CGST Rules also recognise refund claims relating to amounts paid under Sections 107(6) and 112(8), and the refund procedure requires appropriate supporting documentation.
In practical terms, Section 115 can be understood through a simple formula:
Qualifying appeal payment + Refund becomes due due to appellate order + Refund → Interest under Section 56 from payment date to refund date.
Therefore, businesses should carefully track appeal-related pre-deposits and verify that both the principal amount and applicable interest are properly accounted for when a refund becomes due.
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