BYJU’S Insolvency: DGGI Looking To Recover INR 250 Cr GST

The Directorate General of GST Intelligence (DGGI) is reportedly planning to approach the National Company Law Tribunal (NCLT) to recover INR 250 Cr of unpaid taxes from the US subsidiaries of BYJU’S, which is currently undergoing insolvency proceedings. 

Citing sources, the Financial Express reported that INR 230 Cr to INR 250 Cr of unpaid dues have been computed on certain supplies of the US-based subsidiaries to “Indian receivers”.

The sources told the publication that the edtech company kept these transactions “off its books” and allegedly evaded goods and services tax (GST) payable on them. 

“We informed the insolvency professional about the taxes BYJU’S owes, but our request was rejected, as we got late in filing the claim… But we are going to exercise all legal options to recover the tax dues,” a senior official was quoted as saying. 

The DGGI is now considering filing a petition before the NCLT to recover the tax liability.

The development comes at a time when BYJU’S is undergoing insolvency proceedings and its creditors and lenders have claimed thousands of crores of dues. A consortium of the edtech startup’s US-based lenders claimed dues to the tune of INR 11,432 Cr ($1.36 Bn) before the tribunal earlier this year.

While the DGGI missed the bus then, it still has a recourse as the Insolvency and Bankruptcy Code (IBC) allows creditors to file their claims with the resolution professional up to 90 days from the date of the commencement of the corporate insolvency resolution process.

While the 90-day deadline has already expired, the time frame can further be extended provided the creditor can offer proper justification for the delay in filing claims.

Meanwhile, on the other hand, the NCLT, in July 2024, also admitted the Board of Control for Cricket in India’s (BCCI) petition seeking insolvency proceedings against BYJU’S over the latter’s inability to pay dues to the tune of INR 158 Cr. While the matter is scheduled for hearing next on November 18, the cricket board has already sought withdrawal of the insolvency case against the edtech as both parties have come to a settlement. 

On top of this, the Supreme Court (SC) last month set aside a judgment of the National Company Law Appellate Tribunal (NCLAT), which allowed a settlement between BYJU’S and the BCCI. 

This followed an appeal by its US-based lenders alleging that the settlement funds raised by BYJU’S cofounder and CEO Byju Raveendran’s brother Riju Raveendran should have been allocated to financial creditors, and not directly to BCCI, which is an operational creditor.