ITC CREDIT UNDER YNVAT ACT

[Asked by Guest]

ITC CREDIT RULES UNDER TNVAT ACT FOR TAKE OVER OF A RUNNING CONCERN BY THIRD PARTY OR SON AND RUNNING THE SAME UNDER NEW REGISTRATION

[Ganeshan Kalyani]

The respective States' VAT law is silent on whether VAT is liable to be paid on buying/selling a company on slump sale basis. However, there are case laws which states that buying / selling a concern on slump sale is not a regular business activity and hence VAT shall not be applicable on slump sale. However if VAT is charged on such transaction then in my view Input Tax Credit should be allowed to the assessee buying such concern on a slump sale basis . Thanks .

AI Summary

Input Tax Credit entitlement where VAT is charged on slump sale transfers of a running concern should be recognized.
State VAT laws do not expressly address VAT on slump sales; case law treats slump sale as a transfer of a running concern and not a regular business transaction, typically placing it outside VAT scope. If VAT is nevertheless charged on such a transfer, the purchaser should be entitled to claim Input Tax Credit for the VAT borne on acquiring the business.