The Kerala GST Department released a Standard Operating Procedure (SOP) on November 21, 2023, labelled as SGST/973/2023-LEGAL3, specifically addressing cases under the Insolvency and Bankruptcy Code (IBC), 2016 that come before the National Company Law Tribunal (NCLT).
The IBC, established in 2016, aimed to streamline the diverse insolvency laws. It delegates insolvency proceedings to specialized Tribunals like the NCLT (National Company Law Tribunal) and its appellate counterpart, the NCLAT (National Company Law Appellate Tribunal).
This code categorizes creditors into three types: Financial Creditors, Operational Creditors, and other Creditors. According to Section 5 (20) of the Code, an Operational debt refers to “a claim related to the supply of goods or services, including employment, or a debt concerning the payment of dues mandated by prevailing laws and owed to the Central Government, any State Government, or any local authority.”
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An operational creditor holds the privilege to trigger the insolvency resolution process of a corporate debtor, lodge a claim within this process, and partake (sans voting rights) in a creditors’ committee via their representatives.
Throughout the corporate insolvency proceedings, the debtor remains obligated to file its GST return, clear tax dues, and meet all obligations outlined in the CGST / KSGST Act, 2017. The Insolvency and Bankruptcy Board of India (IBBI) designates the Interim Resolution Professional as the recipient of these claims.
The window for filing claims, commencing from the insolvency start date, is specified in the public announcement. Yet, the timely submission of claims faces hurdles due to a lack of notification about the initiation of the insolvency resolution process.
Consequently, these unnotified claims go unacknowledged and become void once a Resolution Plan obtains approval. No claims can be made against the Resolution Applicant who assumes control of the company or unit via such an approved Resolution Plan.
The Insolvency and Bankruptcy Board of India (IBBI) is anticipated to consistently relay public announcement details to a specifically identified official, termed the Nodal Officer, positioned within the Commissionerate.
This appointment aims to ensure prompt receipt of IBBI notifications and facilitate timely submission of claims to the Interim Resolution Professionals/Resolution Professional, aligning with the specified timeframe stated in Form A/Public announcement, beginning from the insolvency commencement date.
To uphold revenue interests and streamline procedures, the Deputy Commissioner-; Legal Cell, Office of the Commissioner of State GST, Kerala, assumes the role of the State Nodal Officer for the SGST Department.
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His responsibilities encompass receiving notifications regarding the commencement of insolvency resolution processes and disseminating this information to field units. This dissemination ensures compliance with the Insolvency and Bankruptcy Code, 2016 provisions, prompting necessary actions within the department.
To establish a robust communication channel between the Nodal Officer at the Commissionerate and district field officers, along with subsequent monitoring of field units’ actions, District Nodal Officers are appointed on an ex-officio basis, detailed in Annexure A for this specific purpose.
The following guidelines are laid out concerning the appointment of the State Nodal Officer and District Nodal Officers:
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The State Nodal Officer will receive notifications regarding the commencement of insolvency resolution processes for units/companies from the IBBI via the dedicated email ID: cstlglibbi.sgst@kerala.gov.in.
The State Nodal Officer will expeditiously disseminate this information, using the mentioned official email, to all Joint Commissioners (Taxpayer Services) within three working days.
Subsequently, the District Joint Commissioner (Taxpayer Services) will relay this information to their respective Taxpayer Services Circle/Division, providing necessary instructions regarding time constraints and copying the District Nodal Officer for reference.
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The District Nodal Officer will collaborate with the officer from the respective Taxpayer Services Circle/Division and the Joint Commissioner to ensure the prompt submission of claims before the Resolution Professional and to oversee subsequent follow-up measures.
On a daily basis, the District Nodal Officer will diligently monitor the IBBI’s official website at www.ibbi.gov.in to ascertain if any new Companies/Units are entering insolvency proceedings.
Upon identification, the District Nodal Officer will relay this information to the Joint Commissioner (Taxpayer Services) and the relevant Taxpayer Services Circle/Division.
The officers within the Taxpayer Services Circles/Divisions are entrusted with the responsibility of daily checking the public announcements for any newly affected parties entering insolvency on the website www.ibbi.gov.in.
This holds particular significance as officers with jurisdiction can readily identify the companies within their purview from the insolvency proceedings list. The dedicated webpage for accessing public announcements is located under “Corporate Process–> Public Announcement” on the Home Page. This proactive approach is geared towards facilitating the timely submission of claims.
The concerned Taxpayer Services Circle/Division, in instances where there are outstanding arrears against the unit/company listed, should appropriately file their claims using Form B and furnish all pertinent documents to the Interim Resolution Professionals/Resolution Professionals. This step is crucial to safeguard revenue and facilitate the collection of government dues. Moreover, they must notify the respective District Nodal Officer about these actions.
All Taxpayer Services Circles/Divisions should engage in correspondence with the Resolution Professional (RP) concerning the finalization of the Resolution Plan.
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Concurrently, regular verification on the website www.ibbi.gov.in is necessary to check for any orders issued by NCLT regarding resolution, liquidation, or withdrawal of application. The dedicated webpage to access NCLT and IBBI-issued orders is situated under “Orders –> NCLT/IBBI” on the Home page.
The District Nodal officers must furnish a monthly report delineating their activities, encompassing tasks such as verifying public announcements, lodging any claims, noting IBBI/NCLT-issued orders, and liaising with the Resolution Professional to provide case updates.
This report is to be relayed to the Joint Commissioner (TPS HQ) by the 10th day of the ensuing month, utilizing the provided Annexure B format.
The Joint Commissioner (TPS HQ) holds the responsibility of compiling a comprehensive monthly report for the Commissioner’s oversight. This report aims to monitor the progress and measures taken by the Taxpayer Services Circles/Divisions.
Concurrently, the Additional Commissioner (TPS HQ) will conduct a monthly review of IBBI claims. Attendance at this review is mandatory for the Joint Commissioner (TPS HQ), Joint Commissioners of Taxpayer Service, the State Nodal Officer, District Nodal Officers, and any other officer directed by the ADC (TPS).
SOP including the Annexure enabled to get Access at:
