MUMBAI: Tax recoveries will take a back-seat under the proposed insolvency law. In a bid to boost the sentiment among lenders, even repayment of dues to unsecured creditors has been given a higher priority as against payment of taxes to the government. A close reading of the Insolvency and Bankruptcy Code, 2015 (insolvency bill), shows that the order of priority of repayment of outstanding dues from liquidated assets of the insolvent company is proposed to be changed via suitable amendments in tax laws.
Tax experts laud the bill for providing a legal framework for timely resolution of insolvency disputes, which would reduce the level of distressed loans. It will enable insolvent companies to close down within 180 days without much red ta…
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