GST on sale of ongoing concern

[Kaustubh Karandikar]

XYZ (Proprietory Concern) has sold its entire business to PQR Pvt. Ltd. Under slump sale of ongoing concern arrangement i.e., transfer of a whole of business concern as a going concern. XYZ had received approx. ₹ 50 Crores against this sale. As per Sr. No. 2 of Notification No. 12/2017- Central Tax (Rate) dt. 28.06.2017 as amended, there is an un – conditional exemption from payment of GST for Services by way of transfer of a going concern, as a whole or an independent part thereof. Accordingly, XYZ is not liable to pay GST on the amount of ₹ 50 Crores received. 1) Whether XYZ is required to prepare Tax Invoice and pay GST on the goods viz. capital goods, Raw/ Packing Materials and Finished Goods physically transferred to PQR Pvt. Ltd. after the date of sale deed entered in to with PQR?

AI Summary

Business Sale Exempt from GST Under Notification No. 12/2017; Compliance with Rule 42 Required; Bill of Supply Needed XYZ, a proprietorship, sold its entire business to PQR Pvt. Ltd. as a going concern for approximately 50 Crores. Under Notification No. 12/2017-Central Tax (Rate), services related to the transfer of a going concern are exempt from GST. Consequently, XYZ is not liable to pay GST on the sale. Experts clarified that XYZ does not need to issue a tax invoice for capital goods, raw materials, or finished goods transferred to PQR, but should prepare a bill of supply. Compliance with Rule 42 is necessary due to the exempt nature of the transaction.