Sections 114 and 115: Interest on Refund of the Pre-Deposit

Sections 114 and 115 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.

A short section that quietly answers the biggest objection to the pre-deposit regime: money paid to file an appeal is not money lost while the appeal runs.

Section 115: where an amount paid by the appellant under s.107(6) or s.112(8) is required to be refunded consequent to any order of the Appellate Authority or of the Appellate Tribunal, interest at the rate specified under s.56 shall be payable in respect of such refund from the date of payment of the amount till the date of refund. Section 114 deals with the financial and administrative powers of the President over the Appellate Tribunal, as substituted by the Finance Act, 2023, notified through Notification No. 28/2023-CT dated 31.07.2023, w.e.f. 01.08.2023.

Why the start date matters

Compare the ordinary refund position.

Section 56 — the general provision — pays interest where any tax ordered to be refunded under s.54(5) is not refunded within sixty days from the date of receipt of the application, and interest runs from the date immediately after the expiry of sixty days from that date. So the taxpayer bears the cost of the money until sixty days after applying.

Section 115 does something different. Interest runs "from the date of payment of the amount till the date of refund".

Not from the refund application. Not from sixty days after it. From the date the pre-deposit was made.

On a ₹2 crore pre-deposit carried through an appeal that takes four years, at the s.56 rate of six per cent, that is roughly ₹48 lakh of interest — payable because the section fixes the start date at payment.

What section 115 covers

The amounts: those paid under s.107(6) — the admitted amount in full and 10% of the remaining disputed tax — and under s.112(8) — the further 10% at the Tribunal.

The trigger: the amount being "required to be refunded consequent to any order of the Appellate Authority or of the Appellate Tribunal".

So the entitlement arises from the appellate order itself, not from a separate adjudication of the refund.

The rate: as specified under s.56 — six per cent, with the higher rate in the proviso to s.56 applying where a refund arises from an order of an adjudicating authority, Appellate Authority, Appellate Tribunal or court which has attained finality and is not refunded within sixty days of the application. Section 56 →

Claiming it

The refund of a pre-deposit is claimed under s.54, with the relevant date in Explanation (f) to s.54 — the date of communication of the judgment, decree, order or direction. Refund on an appellate order →

The practical sequence:

1. Obtain the appellate order and the APL-04 or APL-04A summary showing the final demand confirmed. Rule 113 →
2. Check the electronic liability register — the demand should be modified to the confirmed figure.
3. File the refund application under s.54, within two years of the relevant date, with the order, the summary, and the pre-deposit challans.
4. Claim the s.115 interest expressly, computing it from the date of each payment to the date of refund, and annex the computation.
5. Where the department computes interest from the refund application instead, point to the words of s.115 — "from the date of payment of the amount till the date of refund" — which displace the ordinary s.56 start date for this class of refund.
6. Where the refund is delayed beyond sixty days of the application, the ordinary s.56 entitlement also arises on the sanctioned amount, and the two should not be confused.

What section 115 does not cover

Amounts paid other than as a pre-deposit. A DRC-03 paid during an investigation, or a voluntary payment under s.73(5) or s.74A(8)(i), is not an amount paid under s.107(6) or s.112(8). Its refund follows the ordinary s.54 and s.56 route — which is one more reason not to make payments during a search. Spot recovery →

Refunds arising from a High Court or Supreme Court order. Section 115 names the Appellate Authority and the Appellate Tribunal. A refund following a High Court or Supreme Court order is dealt with under s.54 with Explanation (f), and Rule 115 requires the jurisdictional officer to issue an APL-04 stating the final amount confirmed by the Court.

The admitted amount that remains payable. Only amounts required to be refunded attract s.115.

Section 114: the President's powers

Section 114, as substituted by the Finance Act, 2023 w.e.f. 01.08.2023, deals with the financial and administrative powers of the President over the Appellate Tribunal — replacing the earlier provision framed around the National Bench and Regional Benches, which the same amendment replaced with the Principal Bench and State Benches structure. Section 109 →

It is an administrative provision rather than one a taxpayer invokes, but the substitution is part of the same 2023 restructuring that produced the Tribunal as it now stands, and the change of nomenclature runs through ss.117, 118 and 119 as well.

Key takeaways

• Section 115 pays interest on a refunded pre-deposit at the s.56 rate, from the date of payment to the date of refund.
• That start date is materially better than the ordinary s.56 position, which runs from sixty days after the refund application.
• It covers amounts paid under s.107(6) and s.112(8) only.
• The refund is claimed under s.54, with the relevant date under Explanation (f) — the date of communication of the order.
• Claim the interest expressly, with a computation from each payment date.
• Section 114 concerns the President's financial and administrative powers, as substituted in 2023.

Read next

• Section 112: Appeal to the GSTAT and the Second Pre-Deposit
• Section 56: Interest on Delayed Refunds
• Refund on Account of an Appellate or Court Order
• Rules 113 and 113A: APL-04, APL-04A and Withdrawing an Appeal

Disclaimer: Positions stated as on 5 September 2026, based on the CGST Act and Rules as amended to 31 March 2026 (ICAI Bare Law, 12th edition).