Transfer of Manufacturing Unit and accumulated ITC from one state to another

[Vinay Kunte]

We have a GST registered Manufacturing Unit in Daman and want to transfer the unit to Maharashtra. We have huge amount of ITC Accumulated due to the high Imports under Excise and also under GST.

What is the way out / procedure to be followed to enable us to transfer the ITC to the new Unit after utilising the ITC for payment of GST Payable on raw materials, finished goods and capital goods are stock transferred to new unit?

[KASTURI SETHI]

Dear Querist, . ITC-02 has to be filled in on Common Portal System.Procedure has been laid down under Rules 41(1), 41(2), 41(3) & 41(4)CGST Rules, 2017

[Vinay Kunte]

Dear Mr. Kasturi Sir,

Thank you for your reply. But Rule 41 (1) to 41(4) are all related to the event of sale, merger, demerger, amalgamation, lease or transfer or change in the ownership of business for any reason, furnish the details of sale, merger, demerger, amalgamation, lease or transfer of business, in FORM GST ITC-02, electronically on the common portal along with a request for transfer of unutilized input tax credit lying in his electronic credit ledger to
the transferee

In out case there is no sale / merger/ Demerger / amalgamation / lease or transfer or change in ownership of the business but the business is being shifted from 1 state to another under the same ownership (PAN) but to a different Registration as required under GST.

Will the provisions of Rule 41 (1) to 41(4) be applicable in case of the transfer of unit w/o transfer of liability as such under an agreement as there is no change in ownership of the Business?

Please give your valuable guidance in this respect please.

[KASTURI SETHI]

Dear Vinay Ji,

Let me re-examine. I shall revert soon.

[Vinay Kunte]

Dear Mr. Kasturi Sir

Can you guud ne futher in the issue?

[KASTURI SETHI]

Dear Sh.Vinay Kunte Ji,

Pl. refer to your query dated 27.1.19(Serial No.2). When you say it is a transfer to same ownership(PAN is same) but to a different registration, so a person having a different registration under same PAN in an other State is a distinct person as per Section 25(4) of CGST Act, 2017. Thus it is a transfer to a distinct person and I stick to my earlier wherein 'transfer' is covered.

[Vinay Kunte]

Thank you Sir for your valuable input in the matter.

AI Summary

Transfer of input tax credit between distinct registrations requires ITC-02 filing on the common portal under CGST rules. The operative mechanism for transfer of unutilized input tax credit on shifting a unit inter state is electronic filing of FORM GST ITC-02 on the common portal under Rules 41(1)-41(4) of the CGST Rules. A change of registration across states under the same PAN constitutes a distinct person under Section 25(4) of the CGST Act, so the transfer to the receiving registration is covered by those provisions and the ITC-02 procedure applies.