Acquisition of Business

[Murari Agrawal]

Dear Experts, we are a partnership firm propose to acquire the business of another partnership firm with all its assets & liabilities. After such acquisition, we hope we can get the transfer of balances lying in their GST Credit ledgers to our respective Credit ledgers. Seeking your valued opinion.

[KASTURI SETHI]

It is allowed.See Rule 41 of CGST Rules, 2017. Form GST ITC-02 has to be filled electronically by the transferee. Services by way of transfer of a going concern, as a whole or independent part thereof is exempted from GST vide Serial No. 2 of Notification No.12/17-CT(Rate) dated 28.6.17 as amended.

[Ganeshan Kalyani]

GST liabilities & GST credit of the acquiring firm shall get carry forward to you partnership firm.

AI Summary

Transfer of Input Tax Credit permitted on acquisition of a going concern; credits and liabilities transferable via prescribed procedure. Acquisition of a business as a going concern allows transfer of GST input tax credit balances from the transferor to the transferee. The transferee must electronically submit the prescribed transfer notification form under the GST rules to migrate credit ledger balances, and the transfer of a going concern is treated as an exempt supply for GST procedural purposes. GST liabilities and credits tied to the transferred business may be carried forward to the acquiring partnership upon compliance with these procedures.