NON RESDIENT INDIVIDUAL SELLING PLANT & MACHINERY

[CABayyaReddy DK]

Sir/Madam, my client is a partnership firm purchasing a solar plant and machinery and land separately from an NRI individual. She is not registered under GST law and no intention to do business in India.

She purchased this land and plant & machinery through a slum sale agreement from Private limited company where she is a director. She is owning this asset in Individual capacity and want to sale to partnership firm.

Is GST applicable in this transaction? Is RCM payable by the Purchaser firm on this transaction?

Please advice

[Padmanathan KV]

Pls consider the following aspects:

A1. As per the facts, the NRI individual has purchased the land, Plant & machinery through a slum sale agreement. So was it a transfer of business undertaking of the private Ltd company?

A2. If so, now whether the said undertaking is transferred as such to your client firm? 

A3. them, pls consider the eligibility for exemption for services by way of transfer of a going concern as a whole or part thereof. May be some tax planning can be done in my opinion.

B1. If the assets are sold individually, then you need to ascertain the values of the same, which is not given in query. 

B2.  Sale of land will not be subject to GST as its Sch III item, But it shall be exigible to stamp duty. Consider the Income Tax TDS and Capital Gains provisions for the transfer.

B3. The other assets i.e. plant and machinery will be taxable supply. Practical stand is for the NRI to take GST registration If the value of same exceeds Rs.40 lakhs (assuming intra state supply) and pay GST on the same.

B4. In any case, I do not see any RCM liability in hands of firm as there is no import of services here. 

[Narayana Chambers]

Dear Mr. Reddy,

We understand that an NRI (Seller) wants to sell the following assets: 

1. Land
2. Solar Plant & Machinery

In this regard, the applicability of GST is as under: 

Land	GST would be EXEMPT on sale of land, vide Para 5, Schedule-III, CGST Act
Solar Plant & Machinery	GST would be APPLICABLE @ 12%, vide Entry 201A, Schedule II, CGST Rate N/N.

Since, this transaction involves supply of 'Goods', no Reverse Charge is applicable, in terms of N/N 04/2017, Central Tax (Rate). This transaction would be taxable under forward charge.

If the value of transaction exceeds the threshold prescribed u/S 22, CGST, then registration is compulsory. The NRI can use the concept of 'Non-Resident Taxable Person' to obtain temporary registration in terms of Rule 19, CGST Rules.

[VIPUL JHAVERI]

GST ON SALE OF PERSONAL ASSETS ARE EXCLUDED SO IF TRANSACTION IS UNRELATED TO  HER "BUSINESS" 

[Shilpi Jain]

The exemption for sale as going concern will be available only if the sale is of a continuing business.

Facts are insufficient to further advice.

AI Summary

GST treatment of asset sale: plant and machinery taxable while land is exempt; purchaser not liable under reverse charge. Land is exempt from GST under Schedule III and thus not a taxable supply, while sale of the solar plant and machinery is a taxable supply of goods subject to GST under the rate schedule and is payable under forward charge. Reverse charge does not apply to the purchaser. If transaction value exceeds registration thresholds the NRI should obtain GST registration, including temporary registration as a Non Resident Taxable Person. The going concern exemption may apply only if the transfer is of a continuing business or identifiable undertaking; otherwise GST applies and allied stamp duty and income tax (TDS, capital gains) consequences must be considered.