Treatment of Statutory Dues under GST law for Taxpayers under IBC

Under the GST law, taxpayers who are undergoing the insolvency proceedings under the Insolvency and Bankruptcy Code (IBC), 2016 are required to pay their existing statutory dues before they are allowed to proceed with the insolvency resolution process. This article aims to provide an overview of the treatment of statutory dues under GST law for taxpayers under IBC.

Statutory Dues under GST Law

Statutory dues under GST law refer to the amount of tax, interest, penalty, and late fee payable by taxpayers for any non-compliance with the GST regulations. These dues are payable by the taxpayers to the government in a timely and regular manner.

IBC Proceedings and Statutory Dues

Under the IBC, a company that is undergoing insolvency proceedings is required to pay all its statutory dues, including those under GST law, before it can proceed with the insolvency resolution process. The insolvency resolution professional (IRP) appointed for the company is required to make an application to the GST authorities for the verification of any pending statutory dues.

Once the GST authorities verify the pending statutory dues, the IRP is required to pay the dues before any distribution is made to the creditors.

Treatment of Statutory Dues under GST Law for Taxpayers under IBC

Under the GST law, taxpayers under IBC are required to pay their existing statutory dues before they can proceed with the insolvency resolution process. The GST authorities are required to verify any pending statutory dues and issue a certificate of clearance to the IRP before any distribution is made to the creditors.

It is important to note that the GST authorities are not allowed to make any claim for any statutory dues that are not related to the GST law. Furthermore, any claim that is related to the GST law but is not shown in the returns filed by the taxpayer cannot be verified by the GST authorities.

Conclusion

Overall, taxpayers who are undergoing insolvency proceedings under the IBC, 2016 are required to pay their existing statutory dues under GST law before they can proceed with the insolvency resolution process. The GST authorities are required to verify any pending statutory dues relating to GST and issue a certificate of clearance before any distribution is made to the creditors.