Is your company under the Insolvency resolution process? If so, we have not so good news for you.
As per the new rule, within 30 days of appointing an insolvency professional, you need to get a fresh GST registration. And, if you’ve already appointed an insolvency professional, you a month’s time to get that GST registration.
As per the new rule, the registration is valid in every state or union territory in which the corporate debtor has his/her business entity registered.
What’s there is government notification?
As per the government’s notification for the Insolvency and Bankruptcy code, the resolution professional will have to get the GST registration under Section 40 of the CFGT act. As per the section, it’s required that every registered person who makes sales in the periods between the given dates becomes liable or eligible to register till the date to which registration as granted. And, that person will have to declare the income in the first return after the receiving the registration.
The government is still not clear
Many companies aren’t happy with that announcement (as was expected). Rajat Mohan, a partner at AMRG and Associates has said that the government has to give clear answers regarding the tax filings that has already been done by the companies under insolvency. He said that the companies during Insolvency proceedings would’ve been paying the taxes as per the government requirement. In that case, if the transactions are reported again as per the new GST registration, such companies might be taxed doubly.
This new IBC law includes new measures
There are two new measures that the IBC notification provides are as follows:
- The resolution professionals will be eligible to get input tax credit on invoices that cover goods and services.
- Registered persons receiving supplies under registration can get tax input credit on invoices issued as per new GST registration.
But the small businesses are Safe
Small Companies who get the composition scheme won’t have to file GSTR-1 returns and CMP-08 forms.
There are several new measures introduced in the light of the new GST registration. If you want any help regarding this matter, you don’t have to move an inch, just contact our GST experts have your taxation needs met comfortably.