Subject: Clarification in respect of issues under GST law for companies under Insolvency and Bankruptcy Code, 2016 - Reg.
Various representations have been received from the trade and industry seeking clarification on issues being faced by entities covered under Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the "IBC").
2. As per IBC, once an entity defaults certain threshold amount, Corporate Insolvency Resolution Process (hereafter referred to as "CIRP") gets triggered and the management of such entity (Corporate Debtor) and its assets vest with an interim resolution professional (hereafter referred to as "IRP") or resolution professional (hereafter referred to as "RP"). It continues to run the business and operations of the said entity as a going concern till the insolvency proceeding is over and an order is passed by the National Company Law Tribunal (hereinafter referred to as the "NCLT").
3. To address the aforementioned problems, State notification corresponding to Central notification No. 11/2020- Central Tax, dated 21.03.2020 is being issued by the Government prescribing special procedure under section 148 of the Assam Goods and Services Tax Act, 2017 (hereinafter referred to as the "Assam GST Act") for the corporate debtors who are undergoing CIRP under the provisions of IBC and the management of whose affairs are being undertaken by 1RP/RP. In order to ensure uniformity in the implementation of the provisions of the law across the field formations, the Commissioner of state tax, in exercise of its powers conferred under section 168 of the Assam GST Act hereby clarifies various issues in the table below:-
Moreover, section 14 of the IBC mandates the imposition of a moratorium period, wherein the institution of suits or continuation of pending suits or proceedings against the corporate debtor is prohibited.
The said class of persons shall, in his first return, be eligible to avail input tax credit on invoices covering the supplies of goods or services or both, received since appointment as IRP/RP and during the CIRP period but bearing the GSTIN of the erstwhile registered person, subject to the conditions of Chapter V of the Assam GST Act and rule made thereunder, except the provisions of sub-section (4) of section 16 of the Assam GST Act and sub-rule (4) of rule 36 of the Assam GST Rules in terms of the special procedure under section 148 of the Assam GST Act being issued vide State notification corresponding to Central notification No. 11/2020- Central Tax, dated 21.03.2020. This exception is made only for the first return filed under section 40 of the Assam GST Act.
4. This Circular is clarificatory in nature and not meant for any interpretation of provisions of the Act and rules.
5. Difficulties, if any, in implementation of the above instructions may be brought to the notice of the Commissioner at an early date.
6. This Circular shall be deemed to have been issued on 23rd March, 2020.
Sd/- Anurag Goel, IAS.,
Commissioner of State tax, Assam,
Dispur, Guwahati