Delhi GST Dept issued Instructions for Protecting the interest of the Government revenue

The Delhi GST Department issued Instructions vide F. No.3(523)/GST/POLICY/2024/1543-51 dated May 22, 2024 regarding the Protecting the interest of the Government revenue while issuing refund under GST and DVAT Act.

The Insolvency and Bankruptcy Code (IBC), 2016 has been enacted to consolidate and amend the laws relating to reorganisation and insolvency resolution in a time bound manner for maximisation of value of assets, to promote entrepreneurship, availability of credit and balance the interests of all the stakeholder. IBC has recognised three types of creditors i.e. Financial Creditor, Operational Creditor and Other Creditor and Government dues fall under the category of "Operational Credit" for which a claim is required to be filed before the Insolvency Resolution Professional (IRP) or Liquidator, as the case may be, in the prescribed form.

It has come to the notice that Proper Officer(s) are sanctioning refund under DVAT Act and GST Act without ascertaining the status of any pending insolvency/liquidation proceedings against the Registered Person(s) and status of pending dues/claim of the Department. Therefore, in order to protect the interest of the revenue, it is directed that before sanctioning refund amount under DVAT Act or GST Act, Proper Officer(s) shall confirm that whether any insolvency/liquidation proceeding is pending or concluded against the Registered Person(s) and shall also ascertain the status thereof.

Source : GST Portal