Conversion of LLP in Pvt Ltd Company

[Harshit Sanghvi]

We have converted LLP on 28/04/2022 to a Pvt Ltd company and have taken new GST registrations of Pvt Ltd Company.Now we have to file ITC 02 in LLP to transfer all the unutilised credit to Pvt Ltd.

Below are the questions:

1. How we can prove that business has been converted with specific provision to transfer liabilities.

2. We have tried to match all the credit but still if ITC appears in GSTR 2B after transfer then what is to be done.

3. Is there any time limit to file ITC 02?

4. Is there any time limit to surrender LLP GSTNumber?

[Ganeshan Kalyani]

Sir,

reply to 1. as per rule 41 the transferor shall also submit a copy of a certificate issued by a practicing chartered accountant or cost accountant certifying that the sale, merger, de-merger, amalgamation, lease or transfer of business has been done with a specific provision for the transfer of liabilities.

reply to 2. the transferee shall accept the details of input tax credit uploaded by transferor. On acceptance the credit shall be credited to electronic credit ledger. Once this is done then any ITC appearing in 2B shall not be allowed to transfer again.

reply to 3. time limit is not mentioned in rule 41.

reply to 4. no time limit prescribed.

[Harshit Sanghvi]

Thanks for the reply sir

in continuation to the above

how to verify that all liabilities are transferred

In general sense we make a new company in tally and put all the opening balances in new company

this means that all liabilities are taken in new company books or is there any other method

[Shilpi Jain]

1. The fact that it's a conversion From LLP to pvt co would mean it is entirely transferred right? Why is this ques posed. Am I missing anything?

No time limit for filing ITC-02.

Cancellation also no specific time limit in law but apply it to be effective from date of conversion.

[Harshit Sanghvi]

I dont know why law has specifically mentioned liability transfer. Bcz in conversion we always transfer 100% assets and Liabilities

AI Summary

Transfer of Input Tax Credit: LLP-to-private company conversions require certified liability transfer and transferee acceptance for credit migration. Conversion of an LLP to a private company requires a certificate from a practicing chartered or cost accountant certifying the transfer of business with a specific provision for transfer of liabilities. The transferor uploads input tax credit details and the transferee accepts them; on acceptance the credit is credited to the transferee's electronic credit ledger. Rule 41 does not prescribe a time limit for filing ITC 02 or for cancelling the transferor's GST registration, and practitioners commonly verify liabilities by reconciling opening balances in the transferee's books.