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

Transfer of going concern: no reversal of input tax credit for stock on business conversion; file ITC-02 certified by CA. Conversion of a proprietorship into a partnership with GSTIN cancellation due to PAN change is treated as a transfer of going concern; no reversal of input tax credit on stock (inputs, capital goods, WIP) and no need to invoice stock to nil. Parties must complete the prescribed ITC transfer form certified by a chartered accountant, upload it to the common portal, and obtain the transferee's acceptance, in accordance with CGST procedural provisions and the exemption framework for transfers of going concerns.