NEW DELHI: The Central Board of Indirect Taxes and Customs ,CBIC) has requested its box officials to scale back the call for for restoration below the Central GST (CGST) in circumstances the place there’s a ruling below the Insolvency & Bankruptcy Code (IBC,
In a rationalization issued on Tuesday night time, the oblique taxes wing of the federal government pointed to provisions of the CGST Act that permits commissioners to scale back the quantity of dues to be recovered in case of an attraction or “other proceedings”.
With “other proceedings” now not outlined within the legislation CBIC mentioned, “…adjudicating authorities and appellate authorities under IBC are quasi-judicial authorities constituted to deal with civil disputes relating to insolvency and bankruptcy… As the proceedings conducted under IBC also adjudicate the government dues pending under the CGST Act or under existing laws against the corporate debtor, the same appear to be covered under the term ‘other proceedings’ in Section 84 of CGST Act. ,
The clarification follows several queries received by the department.
From now on, tax official shave been told in cases where a confirmed demand for recovery has been issued, for which the requisite form has also been issued against the company facing insolvency action for the amount of statutory dues payable by the corporate debtor to the government Under CGST Act, a reduced demand will be issued. The move will have implications for several cases as the indirect tax wing has made multiple demands related to CGST over the last five years.
“The insolvency and bankruptcy law overrides any other law, and stipulates recovery including tax recovery needs to be made as per the resolution plan approved post NCLT proceedings. This has also been affirmed by the apex court in the case of Ghanashyam Mishra & Sons. This circular will be much appreciated by the industry, as the same provides where the demand is reduced pursuant to NCLT proceedings, the said reduction will be intimated by the commissioner. This circular also resolves the much pending confusion for indirect tax authorities to tackle matters involving interplay with the IBC law and would prevent unnecessary litigation,” mentioned Abhishek Jain, tax spouse at consulting company KPMG.
In a rationalization issued on Tuesday night time, the oblique taxes wing of the federal government pointed to provisions of the CGST Act that permits commissioners to scale back the quantity of dues to be recovered in case of an attraction or “other proceedings”.
With “other proceedings” now not outlined within the legislation CBIC mentioned, “…adjudicating authorities and appellate authorities under IBC are quasi-judicial authorities constituted to deal with civil disputes relating to insolvency and bankruptcy… As the proceedings conducted under IBC also adjudicate the government dues pending under the CGST Act or under existing laws against the corporate debtor, the same appear to be covered under the term ‘other proceedings’ in Section 84 of CGST Act. ,
The clarification follows several queries received by the department.
From now on, tax official shave been told in cases where a confirmed demand for recovery has been issued, for which the requisite form has also been issued against the company facing insolvency action for the amount of statutory dues payable by the corporate debtor to the government Under CGST Act, a reduced demand will be issued. The move will have implications for several cases as the indirect tax wing has made multiple demands related to CGST over the last five years.
“The insolvency and bankruptcy law overrides any other law, and stipulates recovery including tax recovery needs to be made as per the resolution plan approved post NCLT proceedings. This has also been affirmed by the apex court in the case of Ghanashyam Mishra & Sons. This circular will be much appreciated by the industry, as the same provides where the demand is reduced pursuant to NCLT proceedings, the said reduction will be intimated by the commissioner. This circular also resolves the much pending confusion for indirect tax authorities to tackle matters involving interplay with the IBC law and would prevent unnecessary litigation,” mentioned Abhishek Jain, tax spouse at consulting company KPMG.