Transfer of Business

[Kaustubh Karandikar]

XYZ (Proprietor) is converting his business from Proprietor to Private Limited Company as a ‘Going Concern’. The effective date of such transfer will be from 01.04.2023. The GST liability of the proprietor for the month of March’23 which is payable on 20^th April’23, needs to be paid by the Private Limited Company since the transfer includes transfer of all asset and liabilities including the taxes w.e.f. 01.04.23 or by the Proprietor since the invoices for March’23 are issued by the proprietor?

[Amit Agrawal]

"Practical Suggestion":

Let the proprietor pays the subject gst liability of March, 2023 by filing Form GSTR-3B of the proprietorship frim.

As said liability would got shifted to Pvt. Ltd. co. before making such payment, payment so made by the proprietor, should be shown as payment made on behalf of the Pvt. Ltd. Co. (i.e. not by the proprietor per se from his own funds) in respective books of accounts.

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

[Kaustubh Karandikar]

thanks amit ji for your practical solution to the issue. In my view, since the invoices are issued by the proprietory concern, GST liability against the same will be paid by them through GSTR - 3B but the same will be accounted by Pvt. Ltd. Company in their books of accounts.

AI Summary

Business Owner Transition: Who Pays March 2023 GST When Shifting to Private Limited Company? A business owner is transitioning from a proprietorship to a private limited company as a going concern, effective April 1, 2023. The question arises about who should pay the GST liability for March 2023, due on April 20, 2023. One respondent suggests the proprietor should pay the GST via Form GSTR-3B, but the payment should be recorded as made on behalf of the private limited company in its accounts. Another participant agrees, noting that since the invoices were issued by the proprietorship, the liability should be paid by them but accounted for by the new company.