{"id":6793,"date":"2020-04-15T16:45:26","date_gmt":"2020-04-15T11:15:26","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=6793"},"modified":"2024-07-17T11:19:27","modified_gmt":"2024-07-17T05:49:27","slug":"gst-compliance-procedure-for-persons-under-insolvency-and-bankruptcy-code-2016-ibc","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/gst-compliance-procedure-for-persons-under-insolvency-and-bankruptcy-code-2016-ibc\/","title":{"rendered":"GST Compliance Procedure for persons Under Insolvency and Bankruptcy Code, 2016 (IBC)"},"content":{"rendered":"\n<p class=\"has-drop-cap\">In the <a href=\"https:\/\/corpbiz.io\/learning\/key-highlights-of-39th-gst-council-meeting\/\"><strong>39<\/strong><\/a><sup><a href=\"https:\/\/corpbiz.io\/learning\/key-highlights-of-39th-gst-council-meeting\/\"><strong>th<\/strong><\/a><\/sup><a href=\"https:\/\/corpbiz.io\/learning\/key-highlights-of-39th-gst-council-meeting\/\"><strong> GST Council meeting<\/strong><\/a>, there was a mention made about the GST Compliance Procedure under IBC for Corporate Debtors undergoing Corporate Insolvency and resolution process (CIRP). Corporate Debtors simply means a person who has made default in repayment of the amount above prescribed threshold limit. Earlier the threshold limit was <strong>Rs 1 lakh<\/strong> which was recently changed to <strong>Rs 1 crore<\/strong> due to COVID-19 Pandemic.<\/p>\n\n\n\n<p>The management operations of the corporate debtor undergoing CIRP are transferred to an IRP (Insolvency Resolution Professional) or RP (Resolution Professional) during the process of insolvency. Such Corporate Debtor ( Defaulting Company ) undergoing the CIRP and whose management of the affairs are undertaken by the IRP or RP shall now be treated as a distinct person for this purpose and will be liable to take <a href=\"https:\/\/corpbiz.io\/gst-registration\"><strong><em>New GST Registration<\/em><\/strong><\/a> <strong>within 30 days<\/strong> from the date on which IRP\/RP is appointed. Such corporate debtor shall comply with the compliance procedure and <a href=\"https:\/\/corpbiz.io\/gst-return-filing\"><strong>file GST Returns<\/strong><\/a>, comply with all the other related compliances till the period they are undergoing CIRP under IBC.<\/p>\n\n\n\n<p><strong>Notification no 11\/2020 u<\/strong>nder CGST with this regard was issued by CBIC dated\n23.03.2020. A <strong>circular<\/strong> was also\nissued with this regard for the purpose of clarifying some frequently asked\nquestions.<\/p>\n\n\n\n<p><strong>This article deals with:<\/strong><\/p>\n\n\n\n<ul>\n<li>What is the special procedure for Corporate Debtor undergoing CIRP?<\/li>\n\n\n\n<li>How the existing dues under existing GST Number for the pre CIRP period dealt with?<\/li>\n\n\n\n<li>Will the existing registration of the Corporate Debtor be cancelled?<\/li>\n\n\n\n<li>Who is liable to file a return for pre CIRP Period?<\/li>\n\n\n\n<li>Who is liable to file First Return after obtaining new registration under CIRP?<\/li>\n\n\n\n<li>How will be the ITC of invoices issued before notification, to the erstwhile registered person be taken?<\/li>\n\n\n\n<li>How will be ITC claimed by the persons availing supplies from Corporate Debtor on existing Registration number?<\/li>\n\n\n\n<li>Can amount deposited by IRP\/RP in the cash ledger in the existing registration liable for refund?<\/li>\n<\/ul>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/gst-compliance-procedure-for-persons-under-insolvency-and-bankruptcy-code-2016-ibc\/#What_is_the_special_procedure_for_Corporate_Debtor_undergoing_CIRP\" >What\nis the special procedure for Corporate Debtor undergoing CIRP?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/gst-compliance-procedure-for-persons-under-insolvency-and-bankruptcy-code-2016-ibc\/#How_the_existing_dues_under_existing_GST_Number_for_the_pre-CIRP_dealt_with\" >How\nthe existing dues under existing GST Number for the pre-CIRP dealt with?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/gst-compliance-procedure-for-persons-under-insolvency-and-bankruptcy-code-2016-ibc\/#Will_the_existing_registration_of_the_Corporate_Debtor_be_cancelled\" >Will\nthe existing registration of the Corporate Debtor be cancelled?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/gst-compliance-procedure-for-persons-under-insolvency-and-bankruptcy-code-2016-ibc\/#Who_will_be_liable_to_file_return_for_the_Pre-_CIRP_period\" >Who\nwill be liable to file return for the Pre- CIRP period?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/gst-compliance-procedure-for-persons-under-insolvency-and-bankruptcy-code-2016-ibc\/#Who_is_liable_to_file_the_first_return_after_obtaining_new_registration_under_CIRP\" >Who\nis liable to file the first return after obtaining new registration under CIRP?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/gst-compliance-procedure-for-persons-under-insolvency-and-bankruptcy-code-2016-ibc\/#How_will_be_the_ITC_of_invoices_issued_before_notification_to_the_erstwhile_registered_person_be_taken\" >How\nwill be the ITC of invoices issued before notification, to the erstwhile\nregistered person be taken?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/corpbiz.io\/learning\/gst-compliance-procedure-for-persons-under-insolvency-and-bankruptcy-code-2016-ibc\/#How_will_be_the_ITC_claimed_by_a_person_making_supplies_from_Corporate_Debtor_on_existing_GSTIN\" >How\nwill be the ITC claimed by a person making supplies from Corporate Debtor on\nexisting GSTIN?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/corpbiz.io\/learning\/gst-compliance-procedure-for-persons-under-insolvency-and-bankruptcy-code-2016-ibc\/#Can_amount_deposited_by_IRPRP_in_the_cash_ledger_of_existing_registration_of_Corporate_Debtor_be_eligible_for_refund\" >Can\namount deposited by IRP\/RP in the cash ledger of existing registration of\nCorporate Debtor be eligible for refund?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/corpbiz.io\/learning\/gst-compliance-procedure-for-persons-under-insolvency-and-bankruptcy-code-2016-ibc\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_special_procedure_for_Corporate_Debtor_undergoing_CIRP\"><\/span>What\nis the special procedure for Corporate Debtor undergoing CIRP?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul>\n<li>Corporate\ndebtor will be treated as a distinct person, from the date IRP\/RP is appointed.<\/li>\n\n\n\n<li>Corporate\ndebtor would be liable to take New Registration in every state in which he was\nearlier registered.<\/li>\n\n\n\n<li>If\nIRP\/RP is appointed prior to the date of notification, Corporate Debtor shall\ntake registration within 30 days of notification.<\/li>\n\n\n\n<li>First\nreturn under Section 40 of the CGST Act shall be filed for the period; he\nbecomes liable to take registration till date on which registration is granted.<\/li>\n\n\n\n<li>ITC\nof invoices covering the supplies of goods &amp; services received since\nappointment of IRP\/RP but bearing the GSTIN of the erstwhile registered person\n( Previous GSTIN ) can be claimed in first return subject to the condition of\nChapter V of the act, except Section 16(4) and sub-rule (4) of rule 36. It\nmeans capping of 10% on ITC shall not be applicable. <\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_the_existing_dues_under_existing_GST_Number_for_the_pre-CIRP_dealt_with\"><\/span>How\nthe existing dues under existing GST Number for the pre-CIRP dealt with?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul>\n<li>As\nper IBC, no coercive action can be taken against the Corporate Debtor in\nrespect of dues for the period prior to the insolvency commencement date.<\/li>\n\n\n\n<li>Such\ndues will be treated as Operational Debts, and Tax authorities may file claim\nbefore NCLT in IBC.<\/li>\n<\/ul>\n\n\n\n<div class=\"shadow1\"><strong>Note:<\/strong> As per section 14 of IBC, which mandates imposition of Moratorium\nperiod, no fresh proceedings can be initiated and no pending suits shall be continued during this period.<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Will_the_existing_registration_of_the_Corporate_Debtor_be_cancelled\"><\/span>Will\nthe existing registration of the Corporate Debtor be cancelled?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul>\n<li>The\nexisting registration shall not stand cancelled.<\/li>\n\n\n\n<li>If\nrequired, the proper officer may suspend the registration.<\/li>\n\n\n\n<li>In\ncase registration is already cancelled, such cancellation may be revoked after\ntaking appropriate steps.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Who_will_be_liable_to_file_return_for_the_Pre-_CIRP_period\"><\/span>Who\nwill be liable to file return for the Pre- CIRP period?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>It is clarified\nthat IRP\/RP are under no obligation to file return for the pre-CIRP period.\nTherefore it can be reasonably assumed that Corporate Debtor will file the\nreturn for pre-CIRP period.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Who_is_liable_to_file_the_first_return_after_obtaining_new_registration_under_CIRP\"><\/span>Who\nis liable to file the first return after obtaining new registration under CIRP?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul>\n<li>It is the duty of IRP\/RP to furnish returns, pay tax and comply with GST law during CIRP period.<\/li>\n\n\n\n<li>IRP\/RP to make sure that first return for period beginning from, date from which corporate debtor is liable to take registration till date on which registration is granted.<\/li>\n<\/ul>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/aadhar-based-authentication-and-physical-verification-under-gst\/\">Aadhar Based Authentication And Physical Verification Under GST<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_will_be_the_ITC_of_invoices_issued_before_notification_to_the_erstwhile_registered_person_be_taken\"><\/span>How\nwill be the ITC of invoices issued before notification, to the erstwhile\nregistered person be taken?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul>\n<li>The\ncorporate debtor, in the first return, will be eligible to avail input tax\ncredit on the invoices which cover the supplies of goods or services both\nreceived after the commencement of CIRP during CIRP period but bearing GSTIN of\nthe erstwhile registered person (Old GSTIN).<\/li>\n\n\n\n<li>The\ncapping limit of 10% ITC will not be applicable.<\/li>\n\n\n\n<li>This\nexception is made only for the first return filed under section 40 of the CGST\nAct.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_will_be_the_ITC_claimed_by_a_person_making_supplies_from_Corporate_Debtor_on_existing_GSTIN\"><\/span>How\nwill be the ITC claimed by a person making supplies from Corporate Debtor on\nexisting GSTIN?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul>\n<li>Registered persons who are receiving supplies in the period beginning from the date IRP\/RP is appointed till the date new registration is granted to Corporate Debtor or 30 days from the date of notification, whichever is earlier will be eligible to claim ITC on the basis of invoices issued by corporate debtor on the <strong><em>existing GSTIN.<\/em><\/strong><\/li>\n\n\n\n<li>The capping of 10% will also be not applied here.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Can_amount_deposited_by_IRPRP_in_the_cash_ledger_of_existing_registration_of_Corporate_Debtor_be_eligible_for_refund\"><\/span>Can\namount deposited by IRP\/RP in the cash ledger of existing registration of\nCorporate Debtor be eligible for refund?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul>\n<li>Any\namount deposited by IRP\/RP in the existing registration number of Corporate\nDebtor Shall be eligible for refund even though the relevant form GSTR1 and\nGSTR3B are not filed. <\/li>\n\n\n\n<li>The\nperiod of deposit should be between date of appointment of IRP\/RP to the date\nof notification specifying procedure for undergoing CIRP.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>To provide\nrelief to MSME, Govt has increased the threshold limit for applying under IBC\nfrom Rs 1 Lakh to Rs 1 cr.<\/p>\n\n\n\n<p>Moreover,\nintroduction of Special procedure undergoing CIRP is a step taken by government\nto maintain the continuity of compliances by Corporate Debtor undergoing CIRP.<\/p>\n\n\n\n<p>The onus to file\nfirst return is put on the IRP\/RP, so that correct and appropriate information\nis presented.<\/p>\n\n\n\n<p>Also removing capping of 10% while claiming ITC in first returns is a welcome move.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/39th-gst-council-meet\/\">39th GST Council Meeting: Expected Changes\n<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In the 39th GST Council meeting, there was a mention made about the GST Compliance Procedure under IBC for Corporate Debtors undergoing Corporate Insolvency and resolution process (CIRP). Corporate Debtors simply means a person who has made default in repayment of the amount above prescribed threshold limit. Earlier the threshold limit was Rs 1 lakh [&hellip;]<\/p>\n","protected":false},"author":23,"featured_media":6795,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[16,152],"tags":[490],"acf":{"service_id":"132"},"authorName":"Siddharth Gambhir","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/03\/sid.jpg","authorDescription":"Mr. Siddharth Gambhir is a Chartered Accountant by profession and also holding post-graduate degree in Finance and Taxation. He is an Advisory consultant at Corpbiz with experience in Taxation and Auditing.Holding experience in Taxation and Auditing, he holds keen interest in writing new content by updating himself with the latest changes.","postViews":4140,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/6793"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/23"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=6793"}],"version-history":[{"count":16,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/6793\/revisions"}],"predecessor-version":[{"id":65413,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/6793\/revisions\/65413"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/6795"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=6793"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=6793"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=6793"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}