The Kerala GST Department, in its pursuit of efficient insolvency resolution, has recently issued a Standard Operating Procedure (SOP) dated November 21, 2023, under SGST/973/2023-LEGAL3. This SOP specifically addresses cases related to the Insolvency and Bankruptcy Code (IBC), 2016, handled by the National Company Law Tribunal (NCLT).
The IBC, enacted in 2016, aimed to consolidate insolvency laws and established tribunals, namely NCLT and NCLAT, to oversee insolvency proceedings. Categorizing creditors into Financial Creditors, Operational Creditors, and others, the Code defines Operational debt under Section 5 (20) as claims related to goods, services, employment, or dues to governmental bodies.
Operational creditors possess specific rights, including initiating insolvency resolution, filing claims, and participating in creditor committees. Throughout the insolvency process, the corporate debtor must adhere to GST obligations as per the CGST/KSGST Act, 2017.
To enhance communication and streamline processes, the Deputy Commissioner-Legal Cell, Office of the Commissioner of State GST, Kerala, has been appointed as the State Nodal Officer. This officer plays a crucial role in receiving and disseminating information related to insolvency proceedings.
The State Nodal Officer receives initiation details from the Insolvency and Bankruptcy Board of India (IBBI) through cstlglibbi.sgst@kerala.gov.in. This information is promptly shared with Joint Commissioners (Taxpayer Services) within three working days.
District Nodal Officers, appointed on an ex-officio basis, collaborate with Taxpayer Services Circle/Division officers to ensure timely filing of claims. They actively monitor IBBI’s official website for new insolvency cases, promptly communicating relevant details to the Joint Commissioner and the respective Circle/Division.
The responsibility also lies with officers from Taxpayer Services Circles/Divisions to daily check the IBBI website for new insolvency cases. This proactive approach aids in timely claim submissions.
In cases with pending arrears against listed units/companies, concerned Circles/Divisions submit claims using Form B to Interim Resolution Professionals/Resolution Professionals, safeguarding revenue and government dues.
Ongoing communication with Resolution Professionals is emphasized, especially during the finalization of Resolution Plans. Regular verification on the IBBI website ensures awareness of NCLT orders related to resolution, liquidation, or application withdrawal.
District Nodal Officers submit monthly reports detailing activities, including claim submissions and coordination with Resolution Professionals. These reports, following Annexure B, are due by the 10th day of the subsequent month and are sent to the Joint Commissioner (TPS HQ).
The Joint Commissioner (TPS HQ) compiles a consolidated monthly report for the Commissioner, monitoring the progress and actions of Taxpayer Services Circles/Divisions.
Finally, the Additional Commissioner (TPS HQ) conducts monthly reviews of IBBI claims, involving Joint Commissioners, State Nodal Officer, District Nodal Officers, and designated officers instructed by the ADC (TPS). This comprehensive approach ensures a well-coordinated and monitored insolvency resolution process within the Kerala GST Department.
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