The Government of Delhi on June 14, 2023, issued a notification clarifying the treatment of statutory dues under GST law in respect of the taxpayers for whom the proceedings have been finalized under the Insolvency and Bankruptcy Code, 2016
The following has been clarified namely: -
• It has clarified that as per Section 84 of DGST Act which states “Continuation and validation of certain recovery proceedings” if the government dues against any person under DGST Act are reduced as a result of any appeal, revision, or other proceedings in respect of such government dues, then an intimation for such reduction of government dues has to be given by the Commissioner to such person and to the appropriate authority with whom the recovery proceedings are pending. Further, recovery proceedings can be continued in relation to such a reduced amount of government dues.
• It states that Rule 161 of Delhi Goods and Services Tax Rules, 2017 that prescribes FORM GST DRC-25 for issuing intimation for such reduction of demand specified under section 84 of DGST Act. Accordingly, in cases where a confirmed demand for recovery has been issued by the tax authorities for which a summary has been issued in FORM GST DRC-07/DRC 07A against the corporate debtor, and where the proceedings have been finalized against the corporate debtor under IBC reducing the number of statutory dues payable by the corporate debtor to the government under DGST Act or under existing laws, the jurisdictional Commissioner shall issue an intimation in FORM GST DRC-25 reducing such demand, to the taxable person or any other person as well as the appropriate authority with whom recovery proceedings are pending.
[Notification No. F.3 (475) GST/Policy/2022/473-480]
