New Delhi, 29th May 2020 – In a significant development, the Goods and Services Tax Network (GSTN) has introduced a new registration functionality on the GST portal specifically tailored for erstwhile registered entities that have transitioned into corporate debtors under the provisions of the Insolvency and Bankruptcy Code (IBC), 2016. This innovative facility is aimed at assisting companies currently navigating the complex corporate insolvency resolution process, managed by Interim Resolution Professionals (IRP) or Resolution Professionals (RP).

New Delhi, 29th May 2020 – In a significant development, the Goods and Services Tax Network (GSTN) has introduced a new registration functionality on the GST portal specifically tailored for erstwhile registered entities that have transitioned into corporate debtors under the provisions of the Insolvency and Bankruptcy Code (IBC), 2016. This innovative facility is aimed at assisting companies currently navigating the complex corporate insolvency resolution process, managed by Interim Resolution Professionals (IRP) or Resolution Professionals (RP).

Detailed Analysis:

Under the guidelines laid out by the Central Board of Indirect Taxes and Customs (CBIC) in notification no. 11/2020 dated 21st March 2020, it was mandated that corporate debtors must obtain new registrations through IRP/RP. The appointed IRP/RPs are now empowered to initiate this process on behalf of corporate debtors within 30 days from their appointment or by 30th June 2020, depending on which date is later. These registrations are applicable in each of the States/Union Territories where the corporate debtor held previous registrations.

Key compliance procedures for IRP/RP:

• The compliance period starts from the IRP/RP appointment date until the conclusion of the corporate insolvency resolution process.
• From the IRP/RP appointment date, these entities are recognized as distinct legal entities, necessitating new registration in each State/Union Territory where they were previously registered.
• The date of appointment of IRP/RP serves as the effective registration date, and this date must be entered in the "Date of Commencement of Business" field.
• Select the reason for registration as "Corporate Debtor undergoing the Corporate Insolvency Resolution Process with IRP/RP" from the dropdown menu.
• The IRP/RP becomes the Primary Authorized Signatory of the newly registered company and must provide their details as required.
• All inward supplies to the Corporate Debtor from the IRP/RP appointment date should be under the new GSTIN obtained.
• Details in the Principal Place of business/Additional place of business should match the original registration of the Corporate Debtor.
• The new registration application is to be submitted electronically on the GST Portal under the Digital Signature Certificate (DSC) of the Interim Resolution Professional (IRP) or Resolution Professional (RP).
• A single new registration by IRP/RP is sufficient; any change in IRP/RP is considered a change in authorized signatory and doesn't require fresh registration.
• If a different IRP/RP is appointed midway during the insolvency process, changes can be made through a non-core amendment in the registration form.

Changes in Primary Authorized Signatory details can be made by the authorized signatory of the Company or the jurisdictional officer if credentials are not shared with the successor.

Conclusion:

The introduction of the new registration functionality by GSTN is a noteworthy development aimed at simplifying the process for corporate debtors undergoing insolvency resolution. The ability for IRP/RP to initiate and manage this registration process streamlines compliance with CBIC guidelines. Corporate debtors are now recognized as separate entities with distinct registration requirements, ensuring legal compliance during the insolvency resolution process.

This initiative by GSTN demonstrates its commitment to facilitating the implementation of the Goods and Services Tax (GST) and supporting stakeholders in the corporate insolvency resolution process. For IRP/RPs looking to initiate the registration process, the GST portal provides a user-friendly pathway to compliance. This move aligns with the larger goals of enhancing transparency and efficiency within the tax system, further underscoring the importance of GSTN's role in the tax ecosystem. For more details on the registration process, IRP/RPs can visit the GST portal's registration section to get started.

Press Release

GSTN enables New Registration functionality for Insolvency Resolution Professionals

New Delhi, 29thMay 2020: The Goods and Services Tax Network (GSTN) has enabled New Registration functionality on the GST portal for erstwhile registered entities who are now corporate debtors under the provisions of the Insolvency and Bankruptcy Code (IBC), 2016. This facility will benefit the companies which are undergoing the corporate insolvency resolution process and whose management affairs are being undertaken by Interim Resolution Professionals (IRP) or Resolution Professionals (RP).

To use this functionality, the appointed IRP/RP should choose the reason to obtain new registration in the drop down menu as "Corporate Debtor undergoing the Corporate Insolvency Resolution Process by IRP/RP" while applying for registration on the GST portal.

The CBIC, in its notification no. 11/2020 dated 21st March 2020, had stated that the corporate debtors shall be liable to obtain new registration through IRP/RP. Accordingly, the IRP/RPs can apply for new registration on behalf of corporate debtors within 30days from their appointment or by 30th June 2020, whichever is later. The registration can be applied in each of the States/UTs where the corporate debtor was registered earlier.

Prescribed Compliance Procedure for the IRP/RP:

The period of compliance shall begin from the date of appointment of IRP/RP till the date on which they undergo corporate insolvency resolution process.

• From the date of appointment of IRP/RP, such entities are treated as distinct persons. They are liable to obtain new registration under each State/Union Territory where it was earlier registered on the PAN and CIN of the Corporate Debtor.
• The effective date of registration would be the date of the appointment as IRP/RP. In the "Date of Commencement of Business" they shall enter the date of the appointment of IRP/RP.
• The date of appointment of IRP/RP shall be the date on which liability arises.
• Select the Reason for Registration as "Corporate Debtor undergoing the Corporate Insolvency Resolution Process with IRP/RP" from drop down.
• The appointed Interim Resolution Professionals (IRP) or Resolution Professionals (RP) shall be Primary Authorized Signatory of the newly registered Company and shall enter their details in the relevant tab of the application mandatorily.
• The IRP/RP shall ensure that the inward supplies made to the Corporate Debtor from the date of the appointment of IRP/RP should be under the new GSTIN  obtained by the IPR/RP.
• In the Principal Place of business/ Additional place of business, the details as specified in original registration of the Corporate Debtors shall be entered.
• The new registration application shall be submitted electronically on GST Portal under DSC of the Interim Resolution Professional (IRP) or Resolution Professional (RP).
• The new registration by IRP/RP will be required only once. In case of a change in IRP/RP, after initial appointment, it would be deemed to be change of authorized signatory and not an appointment of a distinct person requiring a fresh registration.
• In cases where the RP is not the same as IRP, or in cases where a different IRP/RP is appointed midway during the insolvency process, the change in the GST system may be carried out by a non- core amendment in the registration form.

The change in Primary Authorized Signatory details on the portal can be done either by the authorised signatory of the Company or by the concerned jurisdictional officer (if the previous authorized signatory does not share the credentials with his successor) on request of IRP/RP.