![\"GST\"](\"https:\/\/www.akgvg.com\/blog\/wp-content\/uploads\/2022\/07\/No-GST-Exemption-on-Business-Transfer-Between-Distinct-Persons-as-a-Going-Concern.jpg\")
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FACTS OF THE CASE:<\/u><\/strong><\/p>\n QUERIES OF THE CASE:<\/u><\/strong><\/p>\n The questions raised by the company are as follows:<\/p>\n RULING OF AAAR-AP:<\/u><\/strong><\/p>\n It was held that:<\/p>\n As per para 4(c) of Schedule II of the CGST Act,2017<\/strong>,<\/p>\n \u201cWhere any person ceases to be a taxable person, any goods forming part of the assets of any business carried on by him shall be deemed to be supplied by him in the course or furtherance of his business immediately before he ceases to be a taxable person, unless\u2014<\/p>\n (i) the business is transferred as a going concern to another person; or<\/p>\n (ii) the business is carried on by a personal representative who is deemed to be a taxable person\u201d,<\/p>\n So, transferring a business as a going concern to \u201canother person\u201d would be treated as thesupply of services. In this case M\/s. Shilpa Medicare Ltd. Has registered in Andhra Pradesh and Karnataka states under the same PAN which means they are \u201cdistinct persons but not another person\u201d. So, the above provision does not apply in this case and therefore the transaction would be treated as a supply of goods.<\/strong><\/p>\n As per entry no. 2 of notification no. 12\/2017-CT(Rate),the exemption is provided for the supply of services by way of transfer of a business as a going concern, whether as a whole or an independent part thereof.<\/p>\n But as discussed in the above point, the transaction in question is classified as a supply of goods, so the exemption is not provided<\/strong>.<\/p>\n As per Section 18 of CGST Act,2017<\/p>\n \u201cA registered person shall in the event of a sale, merger, demerger, amalgamation, lease, or transfer or change in the ownership of the business for any reason, furnish the details of the sale, merger, amalgamation, lease, or transfer of business, in the form GST ITC-02 electronically on the common portal along with a request for transfer of unutilized input tax credit lying in the transferor\u2019 electronic credit ledger to the transferee.\u201d<\/p>\n As mentioned in the above-stated provision, there must be a change in the constitution of business which means there must be a change in the PAN of the registered person. But as per the facts of the case, the registered person is registered under the same PAN in two different states and there is no change in the constitution of business after the transfer, therefore ITC cannot be transferred by filling the form GST ITC-02.<\/p>\n Also, the transfer of State GST from one state to another is not permissible in GST law.<\/strong><\/p>\n TAKEAWAY:<\/u><\/strong><\/p>\n <\/p>\n This content is meant for information only and should not be considered as an advice or legal opinion, or otherwise. AKGVG & Associates does not intend to advertise its services through this.<\/strong><\/p>\n Posted by<\/p>\n CA Tarun Kapoor<\/p>\n AKGVG & Associates<\/p>\n","protected":false},"excerpt":{"rendered":" The transfer of a going concern in a simple way can be described as the transfer of a running business, which is capable of being carried on by the purchaser as an independent business. To have more understanding regarding the GST applicability on the transfer of business between distinct persons as a going concern, there…<\/p>\n","protected":false},"author":1,"featured_media":3066,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[4],"class_list":["post-3056","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-gst-services","tag-gst-services"],"_links":{"self":[{"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/posts\/3056","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/comments?post=3056"}],"version-history":[{"count":5,"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/posts\/3056\/revisions"}],"predecessor-version":[{"id":3301,"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/posts\/3056\/revisions\/3301"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/media\/3066"}],"wp:attachment":[{"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/media?parent=3056"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/categories?post=3056"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/tags?post=3056"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
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No GST is applicable on the business being transferred as a going concern between distinct persons and unutilized ITC cannot be transferred between the two.<\/p>\n