The Central Board of Indirect Taxes and Customs has directed its officials to take “suitable action” to recover dues from India-based subsidiaries of debt-ridden Infrastructure Leasing & Financial Services, according to an internal note accessed by BloombergQuint. Tax officials have been asked to recover indirect tax from 169 India-based entities of IL&FS, according to the note. 47 subsidiaries of the IL&FS group are closed, and out of the remaining 302 entities, 133 are overseas firms and 169 are based in India, the note said, citing an affidavit filed on Feb. 12 by the central government against the company in National Company Law Tribunal.
While the National Company Law Appellate Tribunal had earlier imposed a moratorium on subsidiaries of IL&FS, the tax department believes that it won’t affect the ascertainment of tax, and recovery once the case is resolved, an official said requesting anonymity. The indirect tax department has used permanent account numbers and the goods and service tax identification numbers of these 169 companies and segregated them based on their jurisdictions, the person cited earlier said. He also said the regional or zonal offices of CBIC have been informed to recover tax from entities that fall under their respective jurisdictions.
Not Just IL&FS
The indirect tax department has also ordered its officials to actively monitor announcements by the NCLT to check if the corporate insolvency resolution process has been initiated against a company that owes tax to the government, the person cited earlier said, adding that if such a case is found, the tax officer will have to file a claim before the interim resolution professional.