Transfer of Business as going concern in part

[Rajan Atrawalkar]

Dealer is a partnership firm consisting of four partners. The firm is doing business of Jewellery shop at two different cities A and B under one single GST Registration. Now, the firm wants to divide into two and two partners were allotted one business and other two retained one business. In the terms of GST, the old firm transferred one business to a new partnership firm as a going concern. The old firm reconstituted retaining two partenres and one business. The transfer of one business to the new partnership firm is exempt vide serial no 2 of Notification 12/2017 (CGST) : “Services by way of transfer of a going concern, as a whole or an independent part thereof”. What are necessary steps to effect above changes? I have decided to take following steps, please guide me for any corrections.

1. Formation of new partnership firm for town B.
2. Apply for GST registration of the same on voluntary basis
3. Prepare transfer deed of from old firm for transfer of B business as going concern along with all assets and liabilities. The consideration will be their capital amount standing in the old firm.
4. Formation / reconstitution of partnership firm of town A.
5. Amend GST Registration of old Firm A.

AI Summary

Jewelry firm split into two entities exempt under GST as going concern; follow steps for compliance. A partnership firm operating jewelry shops in two cities under a single GST registration plans to split into two separate entities. Two partners will manage one business, while the other two will retain the original business. The transfer of one business to a new partnership firm is exempt under GST regulations as a transfer of a going concern. Steps include forming a new partnership for the second city, applying for GST registration, preparing a transfer deed, reconstituting the original firm, and amending its GST registration. It is advised to file ITC-02 by the transferor to complete the process.