Seeks to provide special procedure for corporate debtors undergoing the corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016

Last updated: 23 March 2020

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This notification introduces a special procedure for corporate debtors undergoing the corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016. These companies, managed by interim or resolution professionals, will be treated as distinct entities and require new GST registrations in each state where they were previously registered. They must also file specific returns and have provisions for claiming input tax credit on received supplies.

[To be published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i)]

Government of India

Ministry of Finance

(Department of Revenue)

Central Board of Indirect Taxes and Customs

Notification No. 11/2020 – Central Tax

New Delhi, the 21st March, 2020

G.S.R.....(E).–In exercise of the powers conferred by section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereinafter referred to as the said Act), the Government, on the recommendations of the Council, hereby notifies those registered persons(hereinafter referred to as the erstwhile registered person), who are corporate debtors under the provisions of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), undergoing the corporate insolvency resolution process and the management of whose affairs are being undertaken by interim resolution professionals (IRP) or resolution professionals (RP), as the class of persons who shall follow the following special procedure, from the date of the appointment of the IRP/RP till the period they undergo the corporate insolvency resolution process, as mentioned below.

2. Registration.- The said class of persons shall, with effect from the date of appointment of IRP / RP, be treated as a distinct person of the corporate debtor, and shall be liable to take a new registration (hereinafter referred to as the new registration)in each of the States or Union territories where the corporate debtor was registered earlier, within thirty days of the appointment of the IRP/RP:

Provided that in cases where the IRP/RP has been appointed prior to the date of this notification, he shall take registration within thirty days from the commencement of this notification, with effect from date of his appointment as IRP/RP.

3. Return.- The said class of persons shall, after obtaining registration file the first return under section 40 of the said Act, from the date on which he becomes liable to registration till the date on which registration has been granted.

4. Input tax credit.-(1)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 his appointment as IRP/RP but bearing the GSTIN of the erstwhile registered person, subject to the conditions of Chapter V of the said Act and the rules made thereunder, except the provisions of sub-section (4) of section 16 of the said Act and sub-rule (4) of rule 36 of the Central Goods and Service Tax Rules, 2017 (hereinafter referred to as the said rules).

(2)Registered persons who are receiving supplies from the said class of persons shall, for the period from the date of appointment of IRP / RP till the date of registration as required in this notification or thirty days from the date of this notification, whichever is earlier, be eligible to avail input tax credit on invoices issued using the GSTIN of the erstwhile registered person, subject to the conditions of Chapter V of the said Act and the rules made thereunder, except the provisions of sub-rule (4) of rule 36 of the said rules.

(5) Any amount deposited in the cash ledger by the IRP/RP, in the existing registration, from the date of appointment of IRP/RP to the date of registration in terms of this notification shall be available for refund to the erstwhile registration.

Explanation.- For the purposes of this notification, the terms “corporate debtor”, “corporate insolvency resolution professional”, “interim resolution professional” and “resolution professional” shall have the same meaning as assigned to them in the Insolvency and Bankruptcy Code, 2016 (31 of 2016).

[F.No.20/06/03/2020-GST]

(Pramod Kumar)

Director, Government of India

FAQ :

This special procedure is for corporate debtors who are undergoing the corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016, and whose affairs are managed by an interim resolution professional (IRP) or resolution professional (RP).

The corporate debtor, managed by the IRP/RP, will be treated as a distinct person and must obtain a new GST registration in each state or union territory where they were previously registered. This new registration must be obtained within thirty days of the IRP/RP's appointment.

If the IRP/RP was appointed before this notification was issued, they must obtain the new registration within thirty days from the commencement of this notification, with the effective date being their appointment date.

After obtaining the new registration, the corporate debtor must file their first return under section 40 of the Act. This return covers the period from when they became liable for registration until the date registration was granted.

Yes, in their first return, the corporate debtor can claim input tax credit on supplies received since the IRP/RP's appointment, even if the invoices bear the previous GSTIN. Certain conditions apply, and specific provisions of section 16(4) and rule 36(4) are excluded.

Businesses receiving supplies from these corporate debtors are eligible to claim input tax credit on invoices issued using the erstwhile GSTIN for the period from the IRP/RP's appointment until the new registration date or thirty days from the notification date, whichever is earlier. Certain conditions apply, and specific provisions of rule 36(4) are excluded.