In 39th GST Council Meeting which was held on 14 March 2020, various changes took place under the
GST Law and one of the major change brought was is in respect of Corporate Debtors against which Corporate Insolvency Resolution Procedure has been initiated or if gets initiated. The Council has proposed certain substantial changes which shall be followed by IRP/RP during their tenure, till the period the Corporate Debtor undergoes insolvency procedure.
From the date of appointment of IRP/RP, the Company shall be treated as a distinct person of Corporate Debtor and thus shall be liable to take new registration from the GST department in each of the States or Union territories, wherever the corporate debtor was registered earlier, within thirty days of the appointment of the IRP/RP.
Further, in cases, where the IRP/RP has already been appointed before issuance of Notification No. 11/2020-CGST dated 23 March, then the Company shall take registration within thirty days from the commencement of said notification, with effect from the date of his appointment as IRP/RP.
Updated by Team Taxgen as on 5th May 2020 , Vide Notification No : 39/2020 Central Tax 1. As per Notification No : 11/2020 the Corporate Debtor under CIRP has to take a new registration within 30 days of Appointment of IRP/RP but notification 39/2020 seeks to extend time limit by substituting Para 2 as follows a. within thirty days of the appointment of the IRP/RP or b. by 30th June, 2020, whichever is later.
GST Authority clarified vide Circular No.134/04/2020-GST dated 23 March 2020 where it cleared that the registration of an entity undergoing CIRP should not be canceled under the provision of Section 29 of the CGST Act 2017.
However, the proper officer may suspend the GST Registration, if needed and if the GST Registration of
an entity undergoing CIRP has been cancelled, and if the same is within the period of revocation, then the cancellation must be revoked.
In continuation to this, after getting registered, the IRP/RP is required to file the return under Section 40 of the CGST Act 2017 immediately for the period beginning the date on which IRP/RP became liable to take registration till the date on which registration has been granted and all the other returns shall be filled as like always.
The IRP/RP is not under any obligation to comply with the legal requirements pre-CIRP period as per Circular No.134/04/2020-GST dated 23 March 2020 i.e. the IRP/RP have to comply with the legal requirements for the period after the Insolvency Commencement Date.
The IRP/RP while filing the first return under Section 40 of the CGST Act 2017, can avail the input tax credit in respect of invoices covering the supply of goods or services or both and bearing the GSTIN of the erstwhile registered person. Provided that the invoices for supply of goods or service, on which ITC has to be claimed must have been received after the appointment of IRP/RP and the rules prescribed under the Chapter V of the CGST Act 2017 and rules prescribed thereunder has to be followed 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.
GST Authority vide Circular No.134/04/2020-GST dated 23 March 2020 has provided an exception of not following the 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 has been made only for the first return filed under section 40 of the CGST Act.
Until the new registration is granted to the IRP/RP, the person receiving the supply of goods or services from the Corporate Debtor for the period from the date of appointment of IRP/RP till the date of registration, must avail the Input Tax Credit in respect of invoices bearing the GSTIN of the erstwhile registered person./
If the IRP/RP has deposited any cash in the electronic cash ledger from the date of appointment of IRP/RP till the date of the grant of registration of the existing firm, then the same shall be available as a refund to the IRP/RP. The refund has to be claimed under the head refund of cash ledger, even though the relevant FORM GSTR-3B/GSTR-1 has not been filed for the said period.
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