161Interest payable for incorrect refunds of duty or drawback incorrectly allowed in certain cases

1. Interest is payable in respect of any refund or drawback of duty if section 162 or 163 provides for this section to apply to the refund or drawback.

2. The interest is payable for the period (the interest period) that—

3. begins with the day after the payment date (see subsection (5)); and
4. ends with the repayment date (see subsection (5)).

5. The amount of interest payable is calculated for each day of the interest period in accordance with the following formula:

   $a\; \times \; r\; ÷\; 365$

   Where:

   • a a

     is the amount of the refund or drawback to the extent that it has not been repaid to Customs as at the start of the day

   • r r

     is the prescribed rate of interest applying on that day.

6. The total amount of interest payable is the sum of the amounts calculated under subsection (3) for each day of the interest period.

7. In this section, payment date and repayment date have the meanings given to those terms in section 162(2) or 163(2) or (4) (as applicable).

8. The power to prescribe a rate of interest for the purposes of item r in subsection (3) may be exercised for the following purposes:

9. to compensate the Crown for the loss of use of money:
10. to encourage the repayment to Customs of refunds and drawback in the relevant circumstances.

11. See sections 165 to 173 for remissions and refunds of interest payable under this section.