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The Department of Trade and Taxes, Government of NCT of Delhi, issued an instruction on May 22, 2024, regarding the protection of government revenue while issuing refunds under the GST and DVAT Act. The instruction highlights the need to check for any ongoing or concluded insolvency or liquidation proceedings against registered persons before sanctioning refunds. This precaution is necessary to ensure that government dues are accounted for, as these dues fall under “Operational Credit” in the Insolvency and Bankruptcy Code (IBC) 2016.

Proper Officers must verify the status of insolvency or liquidation proceedings from the registered person, the IBBI portal, the NCLT/NCLAT portal, or the Law & Judicial Branch of the Department. If such proceedings are found, they must be reported to the concerned Zonal In-charge for further action.

Additionally, when sending files for ECS under the DVAT Act, the concerned Ward In-charge must certify that no insolvency or liquidation proceedings are pending or concluded against the dealer. This instruction has been approved by the Competent Authority and circulated to relevant officials and departments for compliance and action.


NEW DELHI-110002.

F. No.3(523)/GST/POLICY/2024/1543-51 Dated: 22/05/2024


Sub: Protecting the interest of the Government revenue while issuing refund under GST and DVAT Act.

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

The status of above said proceedings may be ascertained from Registered Person(s) OR web portal of IBBI or web portal of NCLT/NCLAT OR may also be confirmed from Law & Judicial Branch of this Department. In case, any such proceeding is pending/concluded, it shall be brought in the knowledge of refund claim in consultation with the the concerned Zonal In-charge for further processing of Law & Judicial Branch.

It is also directed that while sending the file for ECS under the DVAT Act, concerned Ward In-charge shall also provide a certification as under:

In view of the Instruction No. ______ dated ________ issued by Department, it is certified that as on date, no insolvency/liquidation proceeding is pending/ concluded against the Dealer.”

This is issued with the approval of the Competent Authority

(Kriti Garg, IAS)
Spl. Commissioner (Policy)

F. No.3(523)/GST/POLICY/2024/1543-51

Dated: 22/05/2024

Copy forwarded for information and necessary action to:

1. All Spl./Addl./Joint Commissioners, Department of Trade & Taxex, GNCT of Delhi, Vyapar Bhawan, I.P Estate, New Delhi-02.

2. Special Commissioner, (PR), Department of Trade & Taxes, GNCT of Delhi, Vyapar Bhawan, I.P Estate, New Delhi-02 for publicity of the contents of this instruction.

3. Sr. System analyst, IT for uploading the circular Department.

4. The President/General Secretary, Sales Tax Bar Association(Regd.), Vyapar Bhawan, I.P Estate, New Delhi-02

5. All Assistant Commissioner/GSTOs Department of Trade & Taxes, GNCT of Delhi, Vyapar Bhawan, I.P Estate, New Delhi-02 through Zonal Commissioners.
on website of the

6. PS to the Pr. Commissioner, Department of Trade & Taxes, GNCT of Delhi, Vyapar Bhawan, I.P Estate, New Delhi-02.

7. Guard File.


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