The Authority for Advance Rulings, West Bengal in the case of In Re: M/s. Maheshwary Ispat Limited vide Order No. WBAAR21 of 2024, Order No. 25/WBAAR/2024-25 dated 27.02.2025, has ruled that any sale of assets during liquidation is considered a supply and attracts GST liability. Further, the liquidators are liable for GST registration and compliance when disposing of assets. 

Facts of the Case:  The Applicant is a company currently under liquidation. Mr. Santanu Brahma has been appointed as the Liquidator by the NCLT Kolkata on December 19, 2023. The Liquidator, acting on behalf of the company, sells assets to recover dues.

Issue: Whether the sale of assets by the Liquidator is considered a “supply” under Section 7 of CGST Act, 2017. If yes, is the Liquidator required to obtain GST registration under Section 25. 

AAR Observations and Ruling: The AAR, West Bengal observed as under

• Section 7 of the CGST Act, 2017 defines “supply” to include sale, transfer, barter, exchange, license, rental, lease, or disposal of goods or services for consideration. The AAR relied on its previous ruling in Mansi Oils and Grains Pvt. Ltd. (Order No. 02/WBAAR/2021, dated 29.06.2020), which established that the sale of assets by an NCLT-appointed liquidator constitutes a taxable supply.
• Section 24 of the CGST Act, 2017 mandates compulsory GST registration for persons who are required to pay tax under reverse charge or for specific categories, including insolvency cases. Notification No. 11/2020-Central Tax (21.03.2020) and Notification No. 439-F.T. (03.04.2020) require corporate debtors undergoing the Corporate Insolvency Resolution Process (CIRP) to obtain fresh GST registration. Though the notification explicitly mentions IRP (Interim Resolution Professional) or RP (Resolution Professional), the AAR extended its application to Liquidators, concluding that they are also required to obtain GST registration.

Rulings – The AAR ruled that the sale of assets by the liquidator constitutes a supply of goods under Section 7 of the CGST Act, 2017.Consequently, the liquidator must obtain GST registration in accordance with Section 24 of the CGST Act, 2017. Reliance Placed upon Notification No. 11/2020-Central Tax dated 21-March-2020 and Notification No. 439-F.T. dated 03-April-2020 under the WBGST Act, which outline procedures for corporate debtors undergoing insolvency.