Refund Appeal Procedure during the course of Merger of companies

[Ashiesh Prremji]

Dear Experts,

I am in a situation, wherein the the dealer (hereinafter referred as Transferor company) filed a appeal in June 2021 against the GST Refund rejection. When the appeal was filed, the Transferor company was under the scheme of Merger with appointed date of April 01, 2021. Now, the Approval for Merger in April 2022 been issued by Regional Director effective the appointed date.

Now, the query is, since the Transferor company has already filed appeal having admitted status on GSTN but the appellate authority hasn't yet given the date of hearing and thus no order for the said appeal is passed and by now since the Merger order has already come. What to be done for -

1. The appeal which already been filed, and

2. Since the refund has been rejected, the corresponding ITC, which been debited while filing Refund application, is also not there in Electronic Credit ledger.

In such situation, How the appeal procedure will move on and since with the merger order, Transferor company stands dissolved, what's the way out?

Is it possible now (after the above said appeal), to file Undertaking for PMT-03 to get the ITC back in ECL?

You guidance will be highly helpful.

Thanks, Ashiesh

[Ravinesh Sinha]

Whether new company has taken assest and liabilty after merger with intimation to department for transfer of credit.if yes claim the credit back. And accordingly the new company will file appeal if needed

[Ashiesh Prremji]

Dear Sir,

Thanks for reply but Please explain your views as i am not able to get any correct way to approach. Merger Order has been passed by ROC (Regional Director) in April 22 w.e.f Appointed date 1.4.2021 of merger.

In respect to Transfer of credit (i.e ITC-02) has not been filed because Credit Ledger is already debited when we filed Refund application only and PMT-03 not issued as we filed Appeal.

Due to merger If we take this view that 'GST Refund Receivable' (B/S item) transferred to Transferee company then what option is available to transferee company to process such Refund against which Appeal is pending in name of Transferor company ?

Intimation of merger to GST Department can be given through Cancellation of Registration (by selecting merger reason to cancel ), correct me if i am wrong.

Please suggest how to move ?

[Shilpi Jain]

In case you do not wish to pursue the refund anymore, you could intimate the department whereby the credit should be put back into your electronic credit ledger. After this the ITC form can be filed to transfer the credit to the resultant company.

[Shilpi Jain]

1. The appeal which already been filed, and

The appeal filed will continue in the transferor company's name only since it is in the period during which time the merger is not effective under GST.

2. Since the refund has been rejected, the corresponding ITC, which been debited while filing Refund application, is also not there in Electronic Credit ledger.

In such situation, How the appeal procedure will move on and since with the merger order, Transferor company stands dissolved, what's the way out?

Proceeding will still continue in Transferor company

[Ashiesh Prremji]

Thank you so much Ma'am for your kind suggestion.

If I prefer to go as per Option 1 & do not wish for Refund , Please review once the Process mentioned below which need to follow as per my understanding -

1. Application will submitted to intimate Department & Officer will Reject my Appeal which is in acknowledged status on the basis of that application.

2. After Rejection of Appeal, we need to submit Undertaking to transfer Credit through PMT-03, will it get any issue as already appeal was filed ?

3. If its credited in ECL through PMT-03, then we need to file ITC-02.

4. Lastly, we need to file application for Registration cancellation of Transferor company with reason Transfer of Business due to Merger.

Please correct if i am wrong in process anywhere, as any mistake from my side may result in

no option to proceed further.

Thank You !

[Ashiesh Prremji]

Please reply !

AI Summary

GST refund appeal continuation during corporate merger may remain in transferor's name; credits transferable after intimation. Appellate proceedings filed by the transferor before the merger's effective date continue in the transferor's name. If the transferee assumed assets and liabilities and informed the tax department, the transferee may claim transferred credits. Alternatively, where refund pursuit is abandoned, the transferor can seek restoration of the debited amounts to the Electronic Credit Ledger, submit PMT-03, file ITC-02 to transfer credit to the resultant company, and then cancel the transferor's registration for transfer of business.