GST COMPLIANCE FOR RESOLUTION PROFESSIONAL (RP)

GST COMPLIANCE FOR RESOLUTION PROFESSIONAL (RP)

NEW PROCEDURE FOR GST COMPLIANCE FOR IRP/RP

Changes made vide Notification No. 39/2020 dated 5th May, 2020 under CGST Act, 2017 read with Circular No. 138/08/2020-GST dated 6th May, 2020

  1. Applicability: New Procedure applicable to all Corporate Debtors (Defined in IBC) undergoing Corporate Insolvency Resolution Process (CIRP) who’s affairs are being undertaken by Interim Resolution Professional (IRP) or Resolution Professional (RP), other than those CDs where the CD has deposited all taxes and completed all compliances for the Pre-CIRP period.
  2. Requirement for Fresh registration: The Corporate Debtor, shall be treated as distinct person during the CIRP starting from the date of appointment of IRP/ RP and the RP/ IRP shall be liable to take a new registration in each of the states where the Corporate Debtor was registered earlier within 30 days of appointment or by 30th June, 2020, whichever is later.
  3. Retrospective Applicability: The procedure shall be applicable in cases where IRP. RP have been appointed prior to 21st March, 2020. Such RPs/ IRPs shall take fresh registration as mentioned above within 30 days of the notification i.e. 20th April, 2020 by 30th June, 2020. Fresh Returns to be filed under new registration for all ongoing CIRPs for the entire duration of CIRP.
  4. Returns to be filed: Returns to be filed in the new registration by IRP/ RP w.e.f. CIRP Date. Fresh Returns to be filed under new registration for all ongoing CIRPs for the entire duration of CIRP.
  5. Refund of Tax Deposited: Any tax deposited in cash ledger in any existing Registration during CIRP to be available as refund, which needs to be applied for.

SALIENT FEATURES OF THE NEW PROCEDURE

New Registration by IRP/RP

  1. IRP/RP who are called a class of persons or distinct person under this notification are required to take new GST registration in the name of the Corporate Debtor in each of State or Union Territories, where the Corporate Debtor was registered earlier. However, where corporate debtors have furnished the GST Returns for all tax periods prior to CIRP Date, the IRP/ RP shall not be treated as a distinct person. Therefore, corporate debtors who have not defaulted in furnishing the return under GST would not be required to obtain a separate registration with effect from the date of appointment of IRP/RP. In such cases, the IRP/ RP is required to seek cooperation of the CD in changing the authorised signatory or approach the Jurisdictional Officer, to get the authorised signatory changed on the GST Portal.
  2. New registration is required to be obtained within 30 days from the appointment of IRP/RP or by 30th June, 2020, whichever is later.
  3. the registration would be effective from the date of appointment of IRP/RP. The IRP/RP would be given a different GSTIN as he is being considered a distinct person.

In case of change in RP - Change of Authorised Signatory – Fresh Registration not required

  1. 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 an amendment in the registration form. Changing the authorized signatory is a non- core amendment and does not require approval of tax officer. However, if the previous authorized signatory does not share the credentials with his successor, then the newly appointed person can get his details added through the Jurisdictional authority as Primary authorized signatory.
  2. The new registration by IRP/RP shall be required only once, and in case of any change in IRP/RP after initial appointment under IBC, it would be deemed to be change of authorized signatory and it would not be considered as a distinct person on every such change after initial appointment.

 

Returns under GST to be filed by IRP/RP

  1. IRP/RP will file first return of GST immediately after the registration is granted and that return would be filed for the period from the date of his appointment till the date of registration.
  2. All subsequent returns would be filed on monthly basis e.g. GSTR 3B (summary return of sale and purchase and deposit of tax); GSTR 1 (for reporting sale of goods or services)
  3. Filing of returns are mandatory, even is there is no sale of goods or services in a particular period. IRP/RP are not under an obligation to file returns of pre-CIRP period. Input Tax Credit by Corporate Debtor 1. IRP/RP will be able to claim input tax credit only for the invoices covering the period after the appointment of IRP/RP even if those invoices are bearing the earlier GSTIN of the Corporate Debtor. 2. For availing Input tax Credit all general conditions, notifications and rules shall be applicable 3. IRP/RP should do invoice to invoice matching of Input Tax Credit as appearing online in the erstwhile GSTIN and the new GSTIN to avoid complication and extra efforts.
  4. In case IRP/RP deposit any GST in erstwhile GSTIN, the same can be claimed as refund but would not be available to the customers as Input tax Credit.

Input Tax Credit by Customers of Corporate Debtor

The registered customers of Corporate Debtor would get the Input tax Credit from the date of appointment of IRP/RP till the date of new registration would get the Input Tax Credit even if the erstwhile GSTIN was used in invoices raised to them prior to new registration or before this notification. 2. The registered customers of Corporate Debtor would get the Input tax Credit from the date of new registration only if the new GSTIN is used for raising invoices.

Refund to be applied

  1. Any amount deposited in the cash ledger by the IRP/ RP, in the old registrations from the date of appointment of IRP/ RP to the date of new registration shall be available as refund.

WAY FORWARD FOR ALL IRP/RP

  1. All IRP/RP need to apply for new registration in all their existing cases where compliance is not complete prior to CIRP Date immediately (New Registration to be taken by 30th June, 2020).
  2. IRP/RP would be required to apply for new registration as and when they are appointed in any case where compliance is not complete prior to CIRP Date (within 30 days of appointment)
  3. In cases where CD has completed all compliances or Fresh Registration has already been taken by previous RP, the authorised signatory for an existing GSTIN may changed by making an online application on gst.gov.in where previous authorised signatory is cooperating. Where, the said authorised signatory is not cooperating, RP may approach Jurisdictional officer to get the authorised signatory changed on the portal.
  4. Fresh GST Returns to be filed by IRPs/ RPs for the CIRP period. Transactions for the period from CIRP Date till date of registration to be reported in First GST Return. All IRPs/ RPs will be required to update books of accounts for accurate particulars to be furnished.
  5. IRP/RP should not deposit any GST in the erstwhile GSTIN of the Corporate Debtor unless the CD is compliant during pre-CIRP period. Any amount already deposited by RP/ IRP in existing GSTIN will also be required to be claimed as refund and followed up with the department.
  6. The new GSTIN would be valid during liquidation also (as per the present understanding, however, there is no such mention in the notification). The Input Tax Credit for all expenses incurred during CIRP can be claimed during Liquidation process when any asset of the Corporate Debtor is sold, and GST is charged from the successful bidder.