2020 (7) TMI 141 - AAR - GST

Requirement for registration of Liquidator under GST - Sale of assets of company in Liquidation - HELD THAT - NCLT appoints the resolution professional (hereinafter RP), as defined under section 3 (27) of IBC, as the liquidator subject to her consent. 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. It may be noted that the RP/liquidator acts as the authorized person of the corporate debtor. Once an insolvency professional takes registration as the authorized person of the corporate debtor, it remains in effect with suitable amendment in the certificate of registration if the status or person of the authorized person gets changed. Supply or not - supply of goods or services - sale done by the liquidator of the assets of the applicant - rate of GST - HELD THAT - 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.

Summary

Issues:
1. Admissibility of the Application
2. Submissions of the Applicant
3. Observations and findings of the Bench

Admissibility of the Application:
The National Company Law Tribunal declared the applicant a corporate debtor under the Insolvency and Bankruptcy Code, appointing a liquidator. The applicant sought clarification on whether the sale of its assets by the liquidator constitutes a supply of goods/services under the GST Act and the applicable GST rate. The questions were deemed admissible under the GST Act, as they had not been decided by any authority. The applicant's unregistered status exempted it from administrative jurisdiction requirements.

Submissions of the Applicant:
The NCLT appointed a liquidator, transferring decision-making powers to her. Assets of the applicant, including plant, machinery, and furniture, were auctioned as per IBC regulations.

Observations and findings of the Bench:
The sale of assets by the liquidator qualifies as a supply of goods under the GST Act. The liquidator must register under section 24 of the GST Act and remain registered until her liability ceases. Goods sold, such as plant and machinery, fall under different HSN categories and are taxable under specific Schedules. The ruling mandates the liquidator's registration and upholds the validity of the decision unless declared void under the GST Act provisions.

This judgment clarifies the admissibility of the applicant's queries, the necessity for the liquidator's registration, and the tax implications of asset sales under the GST Act. The ruling provides a comprehensive analysis of the legal obligations and procedures governing insolvency proceedings and GST compliance in such scenarios.