Important Keyword: Notification No. 39/2020 – Central Tax, GST IBC notification 2020, Corporate Insolvency GST compliance, Section 148 CGST Act, IRP RP GST registration, Notification 11/2020 amendment, CBIC May 2020 update, GST procedure for corporate debtors, Finodha GST compliance services, Insolvency GST registration India 2020.
Words: 1350; Read time: 7 minutes.
Table of Contents
[F. No. CBEC-20/06/04/2020-GST]
Government of India
Ministry of Finance
(Department of Revenue)
Central Board of Indirect Taxes and Customs
New Delhi, the 5th May, 2020
Notification No. 39/2020 – Central Tax: Seeks to Make Amendments to Special Procedure for Corporate Debtors Undergoing the Corporate Insolvency Resolution Process Under the Insolvency and Bankruptcy Code, 2016.
[To be published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i)]
G.S.R.....(E).– In exercise of the powers conferred by section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Government, on the recommendations of the Council, hereby makes the following amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.11/2020- Central Tax, dated the 21st March, 2020, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 194(E), dated the 21st March, 2020, namely:-
In the said notification
(i). in the first paragraph, the following proviso shall be inserted, namely: -
“Provided that the said class of persons shall not include those corporate debtors who have furnished the statements under section 37 and the returns under section 39 of the said Act for all the tax periods prior to the appointment of IRP/RP.”;
(ii). for the paragraph 2, with effect from the 21st March, 2020, the following paragraph shall be substituted, namely: -
“2. Registration.- The said class of persons shall, with effect from the date of appointment of IRP / RP, be treated as a distinct person of the corporate debtor, and shall be liable to take a new registration (hereinafter referred to as the new registration)in each of the States or Union territories where the corporate debtor was registered earlier, within thirty days of the appointment of the IRP/RP or by 30th June, 2020, whichever is later:.”.
(Pramod Kumar)
Director,
Government of India
Note: The principal notification was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide notification No. 11/2020-Central Tax, dated the 21st March, 2020, published vide number G.S.R. 194(E), dated the 21st March, 2020.
📚 Frequently Asked Questions (FAQs): Notification No. 39/2020 – Central Tax
Q1: What is Notification No. 39/2020 – Central Tax about?
Answer:
It modifies the special procedure for Corporate Debtors undergoing insolvency under the IBC, 2016, by amending Notification No. 11/2020 – Central Tax. It excludes certain corporate debtors from the earlier directions and revises the timeline for obtaining new GST registration for those managed by IRP/RP.
Q2: Which previous notification does this amend?
Answer:
It amends Notification No. 11/2020 – Central Tax, dated 21st March 2020, which prescribed special GST compliance procedures for companies under the Corporate Insolvency Resolution Process (CIRP).
Q3: Who is a ‘Corporate Debtor’ under IBC?
Answer:
A Corporate Debtor is a company or limited liability entity that owes debt to creditors and is undergoing insolvency proceedings under the Insolvency and Bankruptcy Code (IBC), 2016).
Q4: What key change does Notification No. 39/2020 introduce?
Answer:
It adds a proviso to clarify that the special procedure does not apply to corporate debtors who have already furnished all GSTR-1 (Section 37) and GSTR-3B (Section 39) returns before the appointment of IRP/RP.
Q5: What is the purpose of this clarification?
Answer:
To avoid duplication of GST registration and compliance efforts for companies that were already compliant before the insolvency process began. It ensures smooth transition between the corporate management and insolvency resolution stage.
Q6: What changes were made to the registration requirement?
Answer:
A new paragraph (2) replaces the earlier one, stating that:
From the date of appointment of the IRP/RP, the entity will be treated as a distinct person and must obtain new GST registration within 30 days of appointment or by 30th June 2020, whichever is later.
Q7: What does “distinct person” mean in GST context?
Answer:
Under Section 25(4) of the CGST Act, a “distinct person” refers to a new taxable identity created when a company takes a fresh GST registration due to business changes, such as insolvency, transfer, or merger.
Q8: What happens if the IRP/RP fails to obtain new registration within 30 days?
Answer:
Failure to obtain registration may lead to non-compliance, attracting penalties under Section 122 of the CGST Act, 2017, and difficulty in claiming input tax credit (ITC) or issuing valid tax invoices.
Q9: Why is the effective date set retrospectively (21st March 2020)?
Answer:
Because the original special procedure for CIRP entities began on 21st March 2020. This ensures legal continuity and prevents any compliance ambiguity for cases initiated around that date.
Q10: What sections of the CGST Act are referenced in this notification?
Answer:
Section 148 – Empowers the government to prescribe special procedures for specific classes of taxpayers.
Section 37 – Mandates filing of outward supplies (GSTR-1).
Section 39 – Governs monthly return filing (GSTR-3B).
📘 Stay compliant with Finodha GST Compliance Services.
Q11: What is the implication for companies undergoing insolvency?
Answer:
Corporate debtors must:
Obtain fresh GST registration through the IRP/RP.
Continue GST compliance separately from pre-insolvency operations.
Maintain distinct records for transactions during the CIRP period.
Q12: What is the timeline for obtaining new registration?
Answer:
Corporate debtors under CIRP must apply for new registration within 30 days of IRP/RP appointment or by 30th June 2020, whichever is later.
📘 Need assistance? Apply online through Finodha GST Registration Portal.
Q13: What does this mean for IRPs and RPs?
Answer:
IRPs and RPs are responsible for ensuring:
✅ Fresh registration for the debtor company.
✅ Continuation of GST return filing.
✅ Proper maintenance of pre- and post-insolvency tax records.
They act as the temporary GST-registered entity managers during the resolution process.
Q14: What practical benefits does this amendment bring?
Answer:
Reduces administrative confusion about multiple registrations.
Prevents double filing of returns for the same period.
Provides a clear transition procedure for companies under insolvency.
Aligns GST compliance with IBC restructuring timelines.
Q15: How can businesses ensure full compliance under CIRP?
Answer:
File all pending GSTR-1 and GSTR-3B before IRP/RP appointment.
Take new GST registration within the stipulated time.
Reconcile pre- and post-IRP accounts accurately.
Seek professional help through Finodha GST Return Filing.
🏁 Conclusion
Notification No. 39/2020 – Central Tax provided much-needed clarity for corporate debtors under insolvency by defining their GST obligations during the Corporate Insolvency Resolution Process (CIRP).
It streamlined compliance, ensured fairness for taxpayers who had already filed returns, and aligned GST rules with the Insolvency and Bankruptcy Code (IBC), 2016.
💡 Pro Tip:
If your company is undergoing insolvency, ensure compliance with GST obligations to avoid penalties.
Get expert help with Finodha GST Compliance Services and Finodha GST Registration.
Download PDF: Notification No. 39/2020 – Central Tax
More Information: https://taxinformation.cbic.gov.in/
Read more interesting articles:
