2025 (3) TMI 237 - AAR - GST

Supply of goods/services - sale of assets by the Liquidator - whether the Liquidator must obtain GST registration? - HELD THAT - Notification nos. 11/2020-Central Tax dated 21.03.2020 39/2020-Central Tax dated 05.05.2020 were issued which seeks to provide special procedure for corporate debtors undergoing the corporate insolvency resolution process under the Insolvency and Bankruptcy Code 2016. As per the said Notification the Government has notified those registered persons who are corporate debtors under the provisions of the Insolvency and Bankruptcy Code 2016 (31 of 2016) undergoing the corporate insolvency resolution process and the management of whose affairs are being undertaken by interim resolution professionals (IRP) or resolution professionals (RP) as the class of persons who shall follow special procedure as prescribed therein from the date of the appointment of the IRP/RP till the period they undergo the corporate insolvency resolution process. The West Bengal Authority for Advance Ruling has given a ruling vide in the case of Mansi Oils and Grains Pvt. Ltd. 2020 (7) TMI 141 - AUTHORITY FOR ADVANCE RULING WEST BENGAL 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. Conclusion - i) Any sale of assets of the company Maheshwary Ispat Limited which is in liquidation done by the Liquidator of the company results in a supply of goods and/or services or both within the meaning of supply as defined under section 7 of the CGST Act 2017. ii) The Liquidator who is an insolvency professional being appointed by the Hon ble NCLT Kolkata Bench as a liquidator is required to obtain GST registration in terms of Section 24 of the CGST Act 2017 and WBGST Act 2017 read together with the Notification no. 11/2020-Central Tax dated 21-March-2020 and Notification no. 439-F.Tdated 03-April 2020 issued under the WBGST Act 2017.

Summary

The Authority for Advance Ruling, West Bengal considered an application by the Liquidator of Maheshwary Ispat Limited regarding the GST implications of selling assets during liquidation. The core legal question was whether the sale of assets by the Liquidator constitutes a supply of goods/services under the CGST Act 2017 and whether the Liquidator must obtain GST registration. The key issues addressed were the applicability of GST registration, collection of GST on asset sales, and the process for liquidators in the absence of specific guidelines.The Liquidator argued that the company was in liquidation, and he was appointed by the NCLT Kolkata Bench, facing challenges in obtaining GST registration due to the portal's requirements for promoters/partners. The Revenue did not provide views due to the applicant's unregistered status.The Authority noted the company's liquidation status, the appointment of the Liquidator, and relevant notifications providing procedures for corporate debtors under insolvency resolution. The Authority referenced a previous ruling on liquidators' GST registration requirements.The ruling concluded that the sale of assets by the Liquidator constitutes a supply under the CGST Act 2017, requiring the Liquidator to obtain GST registration as per Section 24 of the CGST Act 2017 and WBGST Act 2017, in line with specific notifications.The significant holdings include the determination that asset sales during liquidation constitute a taxable supply, necessitating GST registration for the Liquidator as an insolvency professional appointed by the NCLT Kolkata Bench. The ruling clarified the obligations and registration requirements for liquidators in such scenarios, aligning with previous interpretations and regulations.The judgment emphasizes the tax implications of asset sales during liquidation, ensuring compliance with GST laws and procedures for liquidators. The ruling provides clarity on the GST registration requirements and obligations for liquidators overseeing asset disposals in the context of company liquidation.