{"id":30735,"date":"2020-04-13T14:43:37","date_gmt":"2020-04-13T09:13:37","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=30735"},"modified":"2024-06-06T14:27:03","modified_gmt":"2024-06-06T08:57:03","slug":"gst-for-companies-under-cirp-as-per-ibc-2016","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/gst-for-companies-under-cirp-as-per-ibc-2016\/","title":{"rendered":"GST for Companies under CIRP as per IBC, 2016"},"content":{"rendered":"

As per the Insolvency and Bankruptcy Code, when a default is made up to the threshold amount and application for the Insolvency is filed with the National Company Law Tribunal<\/a><\/strong>, the Corporate Insolvency resolution process begins (“CIRP”) and management and asset of the company vests with Interim Resolution Professional (“IRP”) or Resolution Professional (“RP”). The IRP or RP continues to run the business of the company till the time the procedure for Insolvency proceeding is not completed. This article simplifies the compliance relating to GST for companies under CIRP<\/strong>.<\/p>\n\n\n\n

Under the CIRP, all the lawsuits and\nproceedings are kept under the moratorium period, and it is held in abeyance to\ngive time to the entity to resolve the status. However, the compliances need to\nbe made by IRP or RP till the insolvency proceeding is over, and an order is passed\nby NCLT. <\/p>\n\n\n\n

Laws under GST<\/h2>\n\n\n\n

Under the GST laws, if the company has\nnot filed previous returns, then the company is not allowed to submit the next\nperiod return, i.e., if the company has defaults before the insolvency period\nin GST, then it needs to comply with previous compliances before complying with\nreturns related to the insolvency period. So, in some cases, RP or IRP does not\nallow to adhere to the default earlier, then they are not able to abide by the\ncompliances pertains to the insolvency period.<\/p>\n\n\n\n

To resolve the practical problems\nbeing faced by such company, the particular procedure under section 148 of the\nCentral Goods and Services Tax Act, 2017 (hereinafter referred to as the\n“CGST Act”) for the corporate debtors who are undergoing corporate\nInsolvency resolution process (CIRP) under the provisions of IBC and the\nmanagement of the corporate debtor are being undertaken by IRP\/RP.<\/p>\n\n\n\n

Dues in GST for Companies under CIRP<\/h2>\n\n\n\n

As per the provisions of IBC and other\nlegal pronouncements, no action can be taken against the corporate debtor\nconcerning pre-dues. It shall be treated as an operational debt and can be\nclaimed by a proper officer in default.<\/p>\n\n\n\n

However, the tax officer can take the details of supplies\/made received and total tax dues pending from the corporate debtor to file the claim before the NCLT. But as per Section 14 of the IBC<\/em><\/strong>, the moratorium period is imposed for filing of the suit and continuation of the pending litigation or proceedings.<\/p>\n\n\n\n

Can the Corporate Debtor Cancel GST Registration?<\/h2>\n\n\n\n

GST registration for such a company cannot be cancelled. However, the same can be suspended by the proper officer. However, if the registration for GST<\/a><\/em><\/strong> of an entity undergoing CIRP has already been cancelled or if it is under the period of revocation of cancel, then such cancellation may be revoked by taking appropriate steps. The IRP\/RP is not liable to file the GST returns of the pre-CIRP period. They are only bound to file the return for the period after the Insolvency Commencement Date.<\/p>\n\n\n\n

\"GST-Registration\"<\/a><\/figure>\n\n\n\n

GST for companies under IBC During the CIRP period<\/h2>\n\n\n\n

New Registration by The Corporate Debtor During the CIRP\nPeriod<\/h3>\n\n\n\n

During the CIRP Period, the corporate\ndebtor shall be considered as a different entity and shall be labile to take\nnew registration with each state or union territory in which corporate debtor\nwas earlier registered.<\/p>\n\n\n\n

Registration shall be taken within\nthirty days of the appointment of IPR\/RP.<\/p>\n\n\n\n

First Return After Obtaining New Registration Under CIRP Period<\/h3>\n\n\n\n

TheIRP\/RP Shall be liable to furnish a return, make a payment, and comply with the provision of the GST Act<\/strong>.<\/p>\n\n\n\n

The first returns shall be filed under\nSection 40 of the CGST Act from the period it becomes liable to take\nregistration till the date for which the registration has been granted.<\/p>\n\n\n\n

ITC WhenInvoices issued when IRP\/RP appointed before Notification and no return filed<\/h3>\n\n\n\n

Section 148 of the CGST Act provides\nthe particular procedure of availing ITC while furnishing the first return\nunder section 40.<\/p>\n\n\n\n

Only the said class of persons shall,\nin their first return, be eligible to avail input tax credit (ITC) on the\nsupplies of goods or services or both, received since appointment as IRP\/RP and\nduring the CIRP period but GSTIN bearing is of the erstwhile registered person\nwho is also subject to the conditions of Chapter V of the CGST Act and rule\nmade thereunder, except the provisions of sub-section (4) of Section 16 of the\nCGST Act and sub-rule (4) of Rule 36 of the CGST Rules. <\/p>\n\n\n\n

In terms of the particular procedure\nunder section 148 of the CGST Act, issued vide notification No.11\/2020-Central\nTax, dated 21.03.2020, this exception is made only for the first return filed\nunder Section 40of the CGST Act.<\/p>\n\n\n\n

ITC For Invoices by Persons Who Availed Supplies from Corporate Debtors Undergoing CIRP When IRP\/RP Appointed before Notification <\/h3>\n\n\n\n

Persons who\nare registered and receiving supplies from the said class of persons shall pay\nfor the period from the date of appointment of IRP \/ RP till the date of\nregistration as required in this notification or 30 days from the date of this\nnotification, whichever is earlier, shall be eligible to avail input tax credit\non invoices issued using the GSTIN of the erstwhile registered person, subject\nto the conditions of Chapter V of the CGST Act and rule made thereunder, except\nfor the provisions of sub-rule (4) of Rule 36 of the CGST Rules. <\/p>\n\n\n\n

A claim of Refund of Amount Deposited in the Cash Ledger of before Registration of the Corporate Debtor by IRP\/RP<\/h3>\n\n\n\n

The\namount deposited by the IRP\/RP in the cash ledger in the existing registration\nof the period starting from the date of appointment of IRP \/ RP till the date\nof notification in which the particular procedure for corporate debtors\nundergoing CIRP, shall be available for refund to the erstwhile registration\nunder the head refund of cash ledger, even though the relevant FORM\nGSTR-3B\/GSTR-1 is not filed for the said period. The instructions which were\ncontained in Circular No. 125\/44\/2019-GST dated 18.11.2019standsmodified to\nthis extent. <\/p>\n\n\n\n

Conclusion<\/h2>\n\n\n\n

GST Compliances for the company under IBC are different from the normal company, the Department of Revenue has issued the notification No.11\/2020- Central Tax, dated 21.03.2020 prescribing special procedure under section 148 of the Central Goods and Services Tax Act, 2017<\/strong>. The clarification with respect to the practical problems being faced by the Company under IBC vide CircularNo.134\/04\/2020-GST dated March 23, 2020, has been issued by the department.<\/p>\n\n\n\n

Also, Read:<\/b> What are the Key Features of Composition Scheme?<\/a><\/mark>.<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

As per the Insolvency and Bankruptcy Code, when a default is made up to the threshold amount and application for the Insolvency is filed with the National Company Law Tribunal, the Corporate Insolvency resolution process begins (“CIRP”) and management and asset of the company vests with Interim Resolution Professional (“IRP”) or Resolution Professional (“RP”). The […]<\/p>\n","protected":false},"author":38,"featured_media":30777,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[49,2562],"tags":[2898],"acf":{"service_id":"96"},"yoast_head":"\nGST for Companies under CIRP as per IBC, 2016 - Enterslice<\/title>\n<meta name=\"description\" content=\"This article simplifies the compliance relating to GST for companies under CIRP as per IBC, 2016. Contact Enterslice for more.\" \/>\n<meta name=\"robots\" content=\"index, follow\" \/>\n<meta name=\"googlebot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta name=\"bingbot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterslice.com\/learning\/gst-for-companies-under-cirp-as-per-ibc-2016\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"GST for Companies under CIRP as per IBC, 2016 - Enterslice\" \/>\n<meta property=\"og:description\" content=\"This article simplifies the compliance relating to GST for companies under CIRP as per IBC, 2016. Contact Enterslice for more.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/enterslice.com\/learning\/gst-for-companies-under-cirp-as-per-ibc-2016\/\" \/>\n<meta property=\"og:site_name\" content=\"Enterslice\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/enterslice\" \/>\n<meta property=\"article:published_time\" content=\"2020-04-13T09:13:37+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-06-06T08:57:03+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/04\/GST-LAW-FOR-COMPANIES-UNDER-IBC.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"670\" \/>\n\t<meta property=\"og:image:height\" content=\"352\" \/>\n<meta name=\"twitter:card\" content=\"summary\" \/>\n<meta name=\"twitter:creator\" content=\"@enterslice\" \/>\n<meta name=\"twitter:site\" content=\"@enterslice\" \/>\n<!-- \/ Yoast SEO plugin. -->","authorName":"Bhawna Dang","authorImageUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/03\/Bhawna-Dang.png","authorDescription":"Bhawna Dang is a competent and skilled professional, holding an educational background in M. Com, Company secretaryship and LL. B. She holds ample experience of 4 years working as an Advisory Associate with a blend of corporate background. She has extensive knowledge in handling matters relating to Reserve Bank of India and has also worked on various secretarial and listing compliances of corporates.","postViews":436,"readingTime":4,"nextPost":{"id":30780,"slug":"tax-deductions-for-disabled-persons-under-section-80u"},"prevPost":{"id":30763,"slug":"requirements-related-to-global-documentation"},"featuredMediaUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/04\/GST-LAW-FOR-COMPANIES-UNDER-IBC.jpg","postTerms":"GST","_links":{"self":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/30735"}],"collection":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/users\/38"}],"replies":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/comments?post=30735"}],"version-history":[{"count":1,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/30735\/revisions"}],"predecessor-version":[{"id":86768,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/30735\/revisions\/86768"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media\/30777"}],"wp:attachment":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media?parent=30735"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/categories?post=30735"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/tags?post=30735"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}