Table of Contents
SOP of the CBIC issued for recovering GST dues from companies in liquidation under IBC.
- SOP of the CBIC for recovering GST dues from entities that are in the process of being liquidated under the Insolvency and Bankruptcy Code (IBC).
- GST and Customs authorities have been designated as operational creditors, and they must lodge claims against corporate debtors once the bankruptcy and resolution procedure has begun. However, the CBIC noted that the Customs and GST authorities take an unusually long time to file claims, resulting in their claims not being accepted after a resolution plan is agreed.
- During the corporate insolvency process, a corporate debtor is responsible for filing GST returns, paying tax, and complying with all other GST requirements. After a company's winding up order is issued, tax authorities are unable to make any claims.
- It was also noted that, despite the settled position that no such claims can be raised once the plan is authorised, and no demands can be made on the resolution applicant who has taken over the company, the authorities litigate on the rejection of the claims.
- One of the reasons for the delay in filing claims is that the GST zonal office in question did not get notification that the settlement procedure had begun.
- As a result, the CBIC released a detailed SOP for going through similar cases.
