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.

[Ganeshan Kalyani]

ITC-02 to be filed by the transferor.

AI Summary

Transfer of going concern exemption requires transferor to file ITC 02 and update GST registrations and transfer deeds. Transfer of one unit of a partnership as a going concern is exempt under Notification 12/2017 (CGST) as transfer of a going concern, whole or independent part. Practical steps: form the new partnership for the transferred business, obtain voluntary GST registration for it, execute a transfer deed transferring assets and liabilities with consideration reflected in capital accounts, reconstitute the remaining partnership, amend the original GST registration, and ensure the transferor files the required ITC-02 return.