IICA ‘Meet the Legend’ Session Explores GST, Insolvency and PMLA Laws

The Indian Institute of Corporate Affairs (IICA), Manesar, recently hosted a special masterclass under its flagship "Meet the Legend" series for participants of the 7th cohort of the Post Graduate Insolvency Programme (PGIP), bringing together leading judicial experts to discuss key legal intersections affecting insolvency practice in India.

The three-hour interactive session featured Mr. J.P. Singh, Hon'ble Judicial Member of the GST Appellate Tribunal, and Mr. Balesh Kumar, Hon'ble Member of the Appellate Tribunal dealing with PMLA, FEMA, PBPTA, NDPSA, and SAFEMA matters.

GST and Insolvency: Understanding Legal Intersections

Mr. J.P. Singh delivered a detailed overview of the Goods and Services Tax (GST) framework and its interaction with the Insolvency and Bankruptcy Code, 2016 (IBC).

He revisited key GST concepts such as:

• Supply and consideration

• Taxable events

• Input Tax Credit (ITC)

• Reverse charge mechanism

• Structure of intra-state and inter-state taxation

The session also examined how these elements function during Corporate Insolvency Resolution Process (CIRP) proceedings.

Singh highlighted major Supreme Court rulings, including:

• Swiss Ribbons Pvt. Ltd. v. Union of India

• Ghanashyam Mishra & Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Co. Ltd.

These judgments clarified that once a resolution plan is approved, claims not included in the plan—including statutory dues—are extinguished.

He also addressed practical GST compliance issues faced by insolvency professionals, including:

• Fresh GST registration for corporate debtors during CIRP

• Filing of tax returns by Interim Resolution Professionals (IRP) and Resolution Professionals (RP)

• Availability of input tax credit

• Impact of the IBC moratorium under Section 14 on tax recovery proceedings

Insolvency and Money Laundering Laws

In the second session, Mr. Balesh Kumar discussed the complex relationship between the Insolvency and Bankruptcy Code (IBC) and the Prevention of Money Laundering Act (PMLA), 2002.

He explained the concept of "proceeds of crime" and the three key stages of money laundering:

• Placement

• Layering

• Integration

The discussion also explored jurisdictional challenges between the National Company Law Tribunal (NCLT) and PMLA authorities, particularly when assets of corporate debtors undergoing insolvency proceedings are attached under anti-money laundering laws.

Role of Section 32A in Insolvency Resolution

Kumar highlighted the importance of Section 32A of the IBC, which protects corporate debtors and new management from liabilities arising from offences committed prior to the resolution process.

He referenced key judicial developments, including Manish Kumar v. Union of India, noting how courts are increasingly working to harmonize insolvency resolution objectives with anti-money laundering enforcement.

Recent judicial observations, he said, have reinforced the primacy of Section 32A in supporting the resolution framework and ensuring effective insolvency outcomes.

Practical Insights for Insolvency Professionals

The interactive masterclass offered PGIP participants valuable insights into cross-statutory challenges frequently faced by insolvency professionals.

Experts emphasized the need for practitioners to understand the interplay between taxation, insolvency law and enforcement regulations to navigate complex resolution processes effectively.

Strengthening Professional Capacity

The session concluded with a vote of thanks by Sudhaker Shukla, Head of the Centre for PGIP, who expressed appreciation to the speakers for sharing their expertise.

The "Meet the Legend" series is part of IICA's ongoing effort to strengthen professional education by connecting students and practitioners with leading judicial and regulatory experts.