Tax liability in case of change in constitution

[J SHAH]

Hello

We have a partnership firm and registered as composition dealer under GST regime. now i want to convert the same to proprietorship by retiring one partner and other one continue in same business under same banner. is there any tax liability arise on closing stock? in proprietorship also i want to continue under composition dealer.

AI Summary

Transition from Partnership to Proprietorship: GST Impact on Closing Stock and Composition Dealer Status Explained. A partnership firm registered as a composition dealer under GST is transitioning to a proprietorship by retiring one partner. The key concern is whether tax liability arises on the closing stock during this transition. One response indicates that taking over a business as a whole is exempt under GST. Another suggests that a new registration is required, and the composition dealer status cannot continue without reapplication. The issue of paying GST twice on the transfer of stock is raised, highlighting the challenge of no input tax credit (ITC) for composition dealers. Overall, fresh registration and consideration of GST implications are necessary.