GST Implications on Conversion of Partnership Firm into LLP

[Kalpesh Shah]

Respected Experts,

Need your views on the following Case :

Facts :

One of Our client is a Partnership Firm engaged into the business of Real Estate Development.

They have started Construction and in the mid of the project.

Now they wish to Convert Partnership Firm into Limited Liability Partnership with the same Partners becoming Designated Partners/Partner in the LLP.

Issue :

1. Will this Conversion be treated as Transfer of Business ?

2. What precautions need to be taken during and after Conversion ?

Thank you in Advance for your valuable views.

AI Summary

Real estate firm converting to LLP seeks clarity on GST implications and business transfer concerns under ITC 02. A client engaged in real estate development is converting their partnership firm into a Limited Liability Partnership (LLP) and seeks advice on the Goods and Services Tax (GST) implications. The main concerns are whether the conversion constitutes a transfer of business and what precautions are necessary. One expert suggests filing ITC 02 for credit transfer if assets and liabilities are transferred. Another expert indicates that a new Permanent Account Number (PAN) is required, implying a transfer of business. However, it is noted that if the PAN remains unchanged, the GST number can remain the same, and it may not be considered a business transfer.