New GST Registration

[Kaustubh Karandikar]

XYZ (Proprietor) is converting his business from Proprietor to Private Limited Company as a ‘Going Concern’. The Private Limited Company, while making the application for new GST Registration, has to select the option under ‘Reason to obtain registration’. Which option to be selected by them? Whether ‘Transfer / Succession of Business’ or ‘Change in Constitution of Business’ or any other option? Kindly guide.

[KASTURI SETHI]

Change in the constitution of the business. This is the basic reason.

[V Rajalakshmi]

Private limited companies can only take over the assets of a proprietorship business, and conversion into a private limited company is not legally possible like merger, Amalgamation etc; therefore, I believe it would be better to choose the option- "others".

[Amit Agrawal]

As party will be claiming various benefits available under the Act against 'transfer of business as going concern', Private Limited Company should specify ‘Transfer / Succession of Business’ (i.e. among the options as available / shown on the GST portal & quoted by you in your query) as reason while taking registration.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[KASTURI SETHI]

This fact cannot be denied that in this scenario constitution of the firm will be changed.

[Kaustubh Karandikar]

thanks all experts for your kind guidance. In my view, more appropriate will be 'Transfer of Business'.

AI Summary

Transfer of Business: select as reason for GST registration when proprietorship converts to company to reflect going concern succession. Choice of reason for new GST registration on conversion of a proprietorship into a private limited company as a going concern presents three options: Transfer / Succession of Business, Change in Constitution of Business, or Others. Commentators differ: some stress the formal change in constitution, another proposes 'others' because statutory conversion mechanisms do not neatly apply, while a practical recommendation favors Transfer / Succession of Business to enable claiming available GST benefits for a transferred going concern.