Demerger of business

[Archna Gupta]

Dear Experts

I have a client where demerger took place during FY 2019-20 but the appointed date of demerger was 1st April 2018 and order of NCLT was passed in August 2019.

Let's suppose there is company A whose major portion of business is demerged to new entity B. The audited balance sheet of the company was signed in November 2019 for FY 2018-19 however NCLT already passed the order in August 2019 so the balance sheet was prepared after demerger in the name of company A and B. But all GST returns for FY 2018-19 were filed in the GST no. of company A.

My query is that how we will file the GSTR-9 and 9C for FY 2018-19 because in GST returns the entire income was disclosed in Company A however in finacial statements it is divided between A and B as per order of demerger.

Please help. It is very urgent.

Regsrds

Archna Gupta

[Ganeshan Kalyani]

Sir, the transaction was already done in Company A during FY 2018-19. All GST returns are under the GSTIN of Company A. So in my view, you should file GSTR-9 & 9C under GSTIN of Company A. The demerger happened in FY 2019-20. So in my view, there should not be an issue for FY 2018-19. Even if there is any with respect to Financial statement, it will form part of reconciliation to show it to the auditor.

[KASTURI SETHI]

I concur with the views of Sh Ganeshan Kalyani Ji.

AI Summary

Guidance on Filing GSTR-9 and 9C Post-Demerger: Use Company A's GSTIN for FY 2018-19 Despite Income Split A business demerger took place where company A's significant portion was transferred to entity B, effective from April 1, 2018, with the NCLT order passed in August 2019. Despite this, all GST returns for the fiscal year 2018-19 were filed under company A's GST number. The inquiry seeks guidance on filing GSTR-9 and 9C for 2018-19, given the financial statements reflect income divided between A and B. Responses suggest filing under company A's GSTIN, as the demerger's formal recognition occurred in FY 2019-20, and any discrepancies can be addressed during reconciliation for auditing purposes.