GST registration mandatory for resolution professional
- Jul 13, 2020 | Divita S Gupta
The West Bengal bench of the Authority on Advance Ruling has held that registration under the Goods and Services Tax will be mandatory for resolution professionals. The applicant, an oil and grain enterprise, had approached the West Bengal AAR seeking an advance ruling claiming that the sale of the assets of the applicant by National Company Law Tribunal appointed liquidator is a supply of goods by the liquidator. In this case, the applicant was a corporate debtor, and a liquidator had been appointed to sell its assets under the liquidation process notified by the Government. The applicant's assets like the plant and machinery, office equipment & furniture were sold by the liquidator, and all supplies attracted different rates under GST. The applicant had ceased business operations when VAT was in implementation and therefore had not registered under GST in 2017. The applicant wished to clarify that as they were not registered under GST and because an NCLT appointed liquidator or resolution professional was selling off their assets as directed by the Government, would the resolution professional need to be registered under GST. The West Bengal bench held that registration under GST would be mandatory for resolution professionals as well. Experts are of the opinion that the ruling is an appealable decision, and the applicant has a right to prefer an appeal before the Appellate Authority for Advance Ruling. While an advance ruling is only binding on the applicant, authorities and officers in other jurisdictions could hold a similar view. As such, resolution professionals who are appointed as liquidators could be asked to register under GST even though it hasn't been determined whether a liquidator is just a medium or is in the business of supply of goods and services.