Regulatory explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Insolvency proceedings require continuous coordination with statutory and regulatory authorities. Specialist services include income tax matters, GST reconciliation, EPFO and ESIC claims, statutory dues verification, regulatory compliance, financial investigations, forensic accounting and assistance in enforcement proceedings — ensuring transparency, statutory compliance and effective administration.
The service set
| Service | Why it arises in a CIRP |
|---|---|
| Income tax matters | Pending assessments, refunds, carry-forward losses that affect plan value |
| GST reconciliation | Input credit positions, returns filed during the process, departmental claims |
| EPFO and ESIC claims | Employee dues with their own statutory character and claim treatment |
| Statutory dues verification | Establishing what is owed to government authorities and on what basis |
| Regulatory compliance | Continuing obligations of the corporate debtor during the process |
| Financial investigations | Establishing what happened to money and assets |
| Forensic accounting | Identifying avoidance, fraudulent and wrongful trading transactions |
| Enforcement proceedings support | Assistance where regulatory agencies are involved |
The stated purpose: these services ensure transparency, statutory compliance and effective administration of insolvency proceedings.
Statutory dues have become more consequential
Section 31 of the amended Code expressly bars any application relating to claims subsumed in an approved resolution plan, including applications by government departments and statutory bodies, and the clean slate principle is codified with retrospective effect from 2016.
ICAI records why that was needed: despite judicial recognition, the principle was repeatedly contested by the Income Tax Department, GST authorities and other statutory bodies, who continued filing applications after plan approval.
The consequence for this work is that statutory dues verification is now the point at which a department's claim is fixed. A claim properly before the CoC and dealt with in the plan is extinguished. One that was never identified is a different question — which makes the completeness of the verification exercise commercially significant to the resolution applicant.
Forensic accounting is no longer optional
Under the amended section 47, if an RP, IRP or liquidator fails to identify and file applications for transactions that could have been discovered with proper professional effort, any stakeholder — a CoC member, a creditor or a board member — can approach the Adjudicating Authority, which may recommend disciplinary action to IBBI.
Three practical consequences:
- A forensic transaction review becomes a standard workstream in every CIRP.
- The review must be documented, including negative findings — an undocumented review cannot answer a section 47 allegation.
- Section 164A extends avoidance powers to personal guarantors, so the review scope now extends beyond the corporate debtor.
ICAI notes the corollary: this creates an opportunity for professionals with forensic and investigative capability, and thousands of avoidance actions are currently pending before NCLTs without resolution.
Employee dues — a distinct workstream
EPFO and ESIC claims are identified separately from general statutory dues, and rightly. They involve a different authority, a different verification basis, and a different position in the distribution analysis. In a labour-intensive corporate debtor they are also frequently among the larger claim categories and the ones on which employees themselves engage with the process.
The emerging practice areas
ICAI identifies areas arising from the evolving ecosystem:
- Distressed asset advisory
- Corporate governance advisory
- Financial due diligence
- Forensic investigations
- Litigation support
- Business monitoring assignments
- Compliance advisory
- Risk management
- Regulatory consultancy
- Value maximisation strategies
These require multidisciplinary knowledge and collaborative engagement among financial, legal and operational professionals — which is why the material's closing recommendation is to build multidisciplinary teams rather than to deepen a single specialism.
Compliance checklist
- Run statutory dues verification to completeness — the clean slate depends on claims being dealt with in the plan.
- Treat EPFO and ESIC as a separate workstream.
- Include a documented forensic transaction review in every CIRP.
- Extend the review to the personal guarantor's transactions under section 164A.
- Record negative findings and scope, not only what was found.
- Maintain continuing regulatory compliance for the corporate debtor during the process.
- Build multidisciplinary teams for the emerging practice areas.
Common mistakes
- Incomplete statutory dues verification, leaving claims outside the plan.
- Skipping the forensic review in an apparently clean case.
- Limiting avoidance review to the corporate debtor.
- An undocumented review that cannot answer section 47.
- Treating employee dues as part of general statutory dues.