Companies under IBC process may get GST relief

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The government may allow companies undergoing resolution under the Insolvency and Bankruptcy Code (IBC) to pay current levies of goods and services tax (GST) without the mandatory payment of past dues. This will remove a hurdle in the bankruptcy resolution process. Ministry of Corporate Affairs and Department of Revenue (DoR) officials have begun talks on the matter and a framework is likely to be unveiled soon, two senior government officials told ET. “The issue is under discussion… A procedure will be worked out,” said one of them, adding that the officials are expected to meet this week to finalise the contours. Tax authorities are treated on a par with operational creditors and eligible to receive payments with others.

However, GST framework currently doesn’t allow a firm to file current tax dues if it has past dues. Penal action has been initiated for noncompliance even in cases where the insolvency resolution process has been initiated or GST registration has been cancelled. This comes in the way of efforts to revive a company under IBC process. Industry organisations have lobbied the government on the issue, asking it to accept current GST dues while giving a moratorium on past ones.

Read More at: https://economictimes.indiatimes.com/news/economy/policy/companies-under-ibc-process-may-get-gst-relief/articleshow/72931581.cms

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