Transfer of Business as a Going Concern

[Shreyansh Agrawal]

My Client is registered under GST as Composition Dealer. Now he want to transfer a business to a person who are not yet registered under GST but he will also take registration under GST as a Composition Dealer. My query is that whether the stock will be treated as a Goods or Service and whether my client is required to pay GST on stock and is there is any consequences to other person if he receive such stock???

AI Summary

GST Exemption on Business Transfer as 'Going Concern': Classified as 'Supply of Service' with Nil Tax Rate A client, registered under GST as a Composition Dealer, plans to transfer their business to an unregistered individual who will register under GST as a Composition Dealer. The query concerns whether the stock is treated as goods or services and the GST implications. The response cites a ruling by the Karnataka AAR, stating that the sale of a 'going concern' is exempt from GST, as it is classified as a 'supply of service' with a nil tax rate. This applies to the transfer of a running business, allowing the purchaser to operate it independently.