GST Jamku AITax to be first charge on property.
Section 82
Notwithstanding anything to the contrary contained in any law for the time being in force, save as otherwise provided in the Insolvency and Bankruptcy Code, 2016 (31 of 2016), any amount payable by a taxable person or any other person on account of tax, interest or penalty which he is liable to pay to the Government shall be a first charge on the property of such taxable person or such person.
In simple terms, we'll discuss a rule related to taxes and insolvency. This rule talks about the order in which certain payments must be made by a person who owes money to the government.
Main Rule: According to the law, no matter what other laws might say, if someone owes money for taxes, interest, or penalties, that amount becomes the first thing they have to pay. This rule is part of the Insolvency and Bankruptcy Code, which was made in 2016.
Explanation: Let's break it down further. If a person, who has to pay taxes or penalties, is not able to pay all their debts and goes through a process called insolvency, the money they owe for taxes gets special treatment. This means, before anything else, the government gets its share.
Priority on Property: The law says that the government has the first claim on the property of the person who owes taxes. This is like saying the government has the first right to take or sell the things the person owns, like houses or cars, to get the money they are owed.
Exceptions: However, there might be some situations where different rules apply. The Insolvency and Bankruptcy Code, 2016, has specific details about when this rule doesn't apply.
Conclusion: In summary, this rule ensures that when someone owes money to the government for taxes, that amount is given top priority when it comes to dividing up the person's assets during an insolvency process. This helps the government collect what it is owed before other creditors.