As per Insolvency and Bankruptcy Code, 2016(“IBC”), once an entity defaults certain threshold amount, Corporate Insolvency Resolution Process (“CIRP”) gets triggered and the management of such entity (Corporate Debtor) and its assets vest with an interim resolution professional (“IRP”) or resolution professional (“RP”). It continues to run the business and operations of the said entity as a going concern till the insolvency proceeding is over and an order is passed by the National Company Law Tribunal.
To address the specific issues of such entities under CIRP, Notification No.11/2020- Central Tax, dated 21.03.2020 has been issued by the Government prescribing special procedure under section 148 of the CGST Act, 2017 for the corporate debtors who are undergoing CIRP under the provisions of IBC and the management of whose affairs are being undertaken by IRP/RP.
The special procedure is to be followed from the date of the appointment of the IRP/RP till the period they undergo the CIRP. Subsequent upon Notification No. 11/2020 – Central Tax dated 21.03.2020, amendment has been made to special procedure laid therein vide Notification No. 39/2020- Central Tax, dated 05.05.2020. As per the procedure inter-alia the IRP / RP are required to obtain GST registration.
For detailed discussion on the special GST procedure for entities under CIRP, article titled Special GST procedure for entities in CIRP under IBC – CBIC clarification dated 06.05.2020 may be referred to.
The facility for registration of IRP / RP has been made available on the GST Portal and instructions in this regard has also been provided therein which are given below:
- Insolvency Resolution Professionals/ Resolution Professionals (IRPs/RPs), appointed to undertake corporate insolvency resolution proceedings for Corporate Debtors, in terms of Notification. No 11/2020-CT, dated 21st March, 2020 can apply for new registration on GST Portal, on behalf of the Corporate Debtors, in each of the States or Union Territories, on the PAN and CIN of the Corporate Debtor, where the corporate debtor was registered earlier, within thirty days of their appointment as IRP/RP.
- They should select the Reason for Registration as “Corporate Debtor undergoing the Corporate Insolvency Resolution Process with IRP/RP” from the drop down menu.
- The date of commencement of business for IRP/RPs will be the date of their appointment. Their compliance liabilities will also come into effect from the date of their appointment.
- The person appointed as IRP/RP shall be the Primary Authorized Signatory for the newly registered Company.
- In the Principal Place of business/ Additional place of business, the details as specified in original registration of the Corporate Debtors, is required to be entered.
- The new registration application shall be submitted electronically on GST Portal under DSC of the IRP/RP
- The new registration by IRP/RP will be required only once. In case of a change in IRP/RP, after initial appointment, it would be deemed to be change of authorized signatory and not an appointment of a distinct person requiring a fresh registration.
- In cases where the RP is not the same as IRP, or in cases where a different IRP/RP is appointed midway during the insolvency process, the change in the GST system may be carried out by a non- core amendment in the registration form.
- The change in Primary Authorized Signatory details on the portal can be done either by the authorised signatory of the Company or by the concerned jurisdictional officer (if the previous authorized signatory does not share the credentials with his successor) on request of IRP/RP.
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