CBIC notifies Special Procedure for Corporate Debtors under IBC [Read Notification]

The Central Board of Indirect Taxes and Customs (CBIC) has laid down the special procedure to be followed in case of Corporate Debtors under the Insolvency and Bankruptcy Code (IBC).

This is according to the GST Council’s decision on 14^th March where the members decided to introduce a special procedure for registered persons who are corporate debtors under the provisions of the Insolvency and Bankruptcy Code, 2016 and are undergoing the corporate insolvency resolution process, so as to enable them to comply with the provisions of GST Laws during the CIRP period.

As per the notification, “those registered persons (hereinafter referred to as the erstwhile registered person), who are corporate debtors under the provisions of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), undergoing the corporate insolvency resolution process and the management of whose affairs are being undertaken by interim resolution professionals (IRP) or resolution professionals (RP), as the class of persons who shall follow the following special procedure, from the date of the appointment of the IRP/RP till the period they undergo the corporate insolvency resolution process.”

The above-mentioned persons shall be treated as a distinct person of the corporate debtor from the date of appointment of IRP / RP and shall obtain a new registration as per the GST Act. However, in cases where the IRP/RP has been appointed prior to the date of this notification, he shall take registration within thirty days from the commencement of this notification, with effect from the date of his appointment as IRP/RP, the notification said.

Such registered persons shall file their first return under section 40 of the said Act, from the date on which he becomes liable to registration till the date on which registration has been granted.

The notification also prescribes the rules regarding the input tax credit to such persons.

Any amount deposited in the cash ledger by the IRP/RP, in the existing registration, from the date of appointment of IRP/RP to the date of registration in terms of this notification shall be available for refund to the erstwhile registration.

To Read the full text of the Notification CLICK HERE