GST Updates:-Special Procedure to be adopted by IRP/RP for Corporate Debtors undergoing Insolvency

Notification :-  11/2020-Central Tax  (Date of Application-21.03.2020)

Old Provision New Provision

New Provisions came in force to resolve conflicts arising between Insolvency and Bankruptcy Code (IBC) 2016 and GST Act

Applicable for Corporate Debtors undergoing corporate insolvency resolution process and the management of whose affairs are being undertaken by Interim Resolution Professionals (IRP) or Resolution Professional (RP).

Procedure to be adopted by IRP/RP for Corporate Debtor –

1. Shall be treated as distinct person w.e.f. the date of appointment of IRP/RP and shall within 30 days of appointment/date of Notification, apply for New Registration in each State/UT where corporate debtor was registered earlier.

2.File First Return u/s 40 of the Act from the date of liability for Registration till the date of Registration.

3.Can avail ITC against the goods or services received since his (IRP/RP) appointment bearing erstwhile GSTIN of Corporate Debtor in First Return.

While claiming such credits time limits as per section 16(4) of CGST Act and restriction on availing unmatched ITC (10%/20%) as per Rule 36(4) of the CGST Rules shall not be applicable.

4. Registered person receiving supplies from Corporate Debtor shall also be eligible to avail ITC on Invoices having erstwhile GSTIN of Corporate Debtor till the date of New Registration.

Restriction on availing unmatched ITC (10%/20%) as per Rule 36(4) of the CGST Rules shall not be applicable in these cases.

5. Any amount deposited in cash ledger of erstwhile registration by IRP/RP shall be available for Refund.

Note:- For meaning of Terms ‘Corporate Debtor’ ‘Interim Resolution Professional’ ‘Resolution Professional’ please refer Insolvency and Bankruptcy Code, 2016

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