Income tax dept may seek first right on recovery of dues under IBC

At present, the recovery of tax dues is possible only after payment to financial creditors under IBC

The income tax (I-T) department may soon request authorities in the finance ministry to intervene so that I-T dues get a higher priority over dues to unsecured creditors under the insolvency law.

At present, the recovery of tax dues is possible only after payment to financial creditors under the Insolvency and Bankruptcy Code (IBC), which comes under the Ministry of Corporate Affairs. 

The tax department has prepared a proposal highlighting issues with the IBC with regard to tax dues. “The entire process of resolution/liquidation under IBC is driven by committee of creditors, and there is no involvement of the I-T