The Government of Tamil Nadu on April 24, 2024, issued clarification regarding the treatment of statutory dues under GST law in respect of the taxpayers for whom the proceedings have been finalised under the Insolvency and Bankruptcy Code, 2016.
It is stated that representations have been received from the trade as well as tax authorities, seeking clarification regarding the modalities for implementation of the order of the adjudicating authority under the Insolvency and Bankruptcy Code, 2016 to demand recovery against such corporate debtor under Tamil Nadu Goods and Services Tax Act, 2017 as well under the existing laws and the treatment of such statutory dues under TNGST Act and existing laws, after finalisation of the proceedings under IBC.
The following has been clarified:
• Section 84 of the TNGST Act reads as follows:
"Section 84 - Continuation and validation of certain recovery proceedings. -
Where any notice of demand in respect of any tax, penalty, interest or any other amount payable under this Act, (hereafter in this section referred to as "Government dues"), is served upon any taxable person or any other person and any appeal or revision application is filed or any other proceedings is initiated in respect of such Government dues, then-
(b) where such Government dues are reduced in such appeals, revisions or in other proceedings-
(i) It shall not be necessary for the Commissioner to serve upon the taxable person a fresh notice of demand;
(ii) the Commissioner shall give intimation of such reduction to him and to the appropriate authority with whom recovery proceedings are pending;
(iii) any recovery proceedings initiated based on the demand served upon him prior to the disposal of such appeal, revision or other proceedings may be continued in relation to the amount so reduced from the stage at which such proceedings stood immediately before such disposal."
For more details, kindly find the document attached below.
[Circular No. 1 (2O22)/2024 – TNGST]
