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Resolution Professional (RP) appointed as liquidator by NCLT is required to take registration under GST and discharge libility of GST on sale of assets of corporate debtor.

M/S. MANSI OILS AND GRAINS PVT. LTD.
(AAR, West Bengal)

NCLT, Kolkata passed an order declaring the applicant a corporate debtor under the provisions of IBC and appointed Smt. Rachna Jhunjhunwala as liquidatorAfter her appointment as liquidator all powers of directors in decision making are vested in Ms. Jhunjhunwala.

The applicant wants to know whether any sale done by the liquidator of the assets of the applicant results in a supply of goods and/or services or both within the meaning of “supply” as defined under section 7 of the GST Act. The applicant also wants to know whether the liquidator needs to get registered under the GST Act.

The plant and machinery, office equipment and furniture of the applicant were auctioned at the price Rs. 2.82 Crores.

Observations and findings of the Bench

Sl No 4 (a) of Schedule II of the GST Act says, where goods forming part of the assets of a business are transferred or disposed of by or under the directions of the person carrying on the business so as no longer to form part of those assets, whether or not for a consideration, such transfer or disposal is a supply of goods by the person.

The liquidator is appointed under section 34 (1) of IBC after NCLT initiates liquidation in terms of section 33 of IBC. As the applicant – the corporate debtor – is not a going concern, the liquidator is required to sell its assets under clauses (a) to (d) of Regulation 32 of the Insolvency and Bankruptcy Board of India (liquidation process) Regulations. The sale of the applicant’s assets like the plant and machinery, office equipment & furniture is, therefore, a supply of goods by the liquidator. She is required to take registration under section 24 of the GST Act.

The sale of the assets of the applicant by NCLT appointed liquidator is a supply of goods by the liquidator, who is required to take registration under section 24 of the GST Act. If she is already registered as a distinct person of the corporate debtor in terms of Notification No. 11/2020 – Central Tax dated 21/03/2020, she should continue to remain registered till her liability ceases under section 29 (1) (c) of the GST Act.


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Author:

TaxReply


Jul 8, 2020


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