Circular No 5/2020-TNGST, (PP6/35622/2019),dated:23rd May, 2020
Sub: Clarification in respect of issues under GST law for companies under Insolvency and Bankruptcy Code, 2016 - Regarding
Ref: Circular No 134/04/2020-GST, dated 23.03.2020 issued by the Department of Revenue, Ministry of Finance Government of India New Delhi.
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")
To address the aforementioned problems, G.O Ms No.68/2020- TNGST, dated 13.04.2020 has been issued by the Government prescribing special procedure under section 148 of the TamilNadu Goods and Services Tax Act, 2017 (hereinafter referred to as the "TNGST 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 Commercial Taxes, in exercise of the powers conferred under section 168 of the TNGST 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.
Sd/- M.A.Siddique
Commissioner of State Tax
Tamil Nadu