cancellation of gst due to change in PAN

[BagheAli Khan]

Dear Sir,

we have a business in srinagar, jammu and kashmir, our gstin for the trading company was voluntarily cancelled due to change in pan, we had converted the company from proprietorship to partnership firm. We held stock on the day of cancellation for the old gstin, my question is whether we need to reverse the itc held for the stock, or do we need to invoice the new gstin to nil the stock.

[KASTURI SETHI]

It is a issue of transfer of going concern. No need to reverse ITC contained in stock of inputs,capital goods, work-in-progress. No need to invoice to nil stock. Procedure is laid down under Section 18(3) of CGST Act and Rule 41 of CGST Rules.

Also go through Notification No. 12/2017-C.T. (Rate), dated 28-6-2017 (serial no.2) as amended, the activity of transfer of a going concern, as a whole or independent part thereof, is exempt from payment of so much Central Tax. The main condition is that the transaction should involve a going concern only, i.e., transfer of business as a whole including assets and liabilities.

[KASTURI SETHI]

You are to fill up Form ITC-02 and it should be duly certified by CA and upload on Common Portal System and transferee will accept the same. This is only requirement. Also go through the following decision of AAR Haryana.

2019 (22) G.S.T.L. 293 (A.A.R. - GST) = 2019 (2) TMI 1080 - AUTHORITY FOR ADVANCE RULING, HARYANA IN RE : B.M. INDUSTRIES

AI Summary

No ITC Reversal Needed for Business Transition; Follow Section 18(3) and Rule 41 with Form ITC-02 A business in Srinagar, Jammu and Kashmir, transitioned from a proprietorship to a partnership, resulting in a GSTIN cancellation due to a PAN change. The query raised concerns about whether to reverse the Input Tax Credit (ITC) for stock held at the time of cancellation or invoice the new GSTIN to nullify the stock. The response clarified that for a transfer of a going concern, there's no need to reverse ITC or invoice the stock. The procedure involves Section 18(3) of the CGST Act, Rule 41 of CGST Rules, and requires filing Form ITC-02, certified by a CA, on the Common Portal System.