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, notification No.15/GST-2, dated 31.03.2020 has been issued by the Government prescribing special procedure under section 148 of the Haryana Goods and Services Tax Act, 2017 (hereinafter referred to as the "HGST Act") for the corporate debtors who are undergoing CIRP under the provisions of IBC and the management of whose affairs are being undertaken by IRP'RP. In order to ensure uniformity in the implementation of the provisions of the law across the field formations, the Commissioner of Slate Tax. in exercise of its powers conferred under section 168 of the HGST 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 instructions contained in Circular issued vide memo No.3561/GST-2. Panchkula dated 16.12.2019 (Circular no. 125/44/2019-GST dt. 18.11.2019 issued by Centre) stands modified to this extent.
4. Difficulty faced, if any. in implementation of the above circular may please be brought to the notice of the Department.
SHEKHAR VIDYARTHI
Excise & Taxation Commissioner-cum-
Commissioner of State Tax, Haryana