Merging of Company and Gods and Service Tax Act

[umeshkumar jhawar]

Dear Sir

One Company ABC Private Limited got merged with PQR Private Limited as per NCLT Order vide order dated 31.01.2025. ABC Private Limited has ITC balance as on 31.01.2025 Rs. 1,00,000.00 at the same time ITC of Rs. 50,000.00 pending for recredit as per Inverted duty refund application.

Question

1. What is the due date for filing of application for cancellation for ABC Private Limited ?

2. Is there any due date for filing ITC-02?

3. Wherther pending recredit of Rs. 50,000.00 possible after cancellation of ABC Private Limited and whether we can file more than two ITC-02?

[YAGAY andSUN]

1. As per Rule 20 of the CGST Rules, in case of merger or amalgamation approved by NCLT, the application for cancellation of registration of the transferor company (ABC Private Limited) must be filed within 30 days from the date of the NCLT order, i.e., by 02.03.2025.

2. There is no prescribed statutory due date under the GST law for filing Form ITC-02; however, it should ideally be filed before applying for cancellation of registration to ensure smooth transfer of unutilized ITC to the transferee company (PQR Private Limited).

3. The pending recredit of ₹50,000 arising from the inverted duty refund can be claimed only if the transferor company’s registration is still active and the refund claim process is complete. Once registration is cancelled, claiming recredit becomes practically difficult. Multiple ITC-02 filings are permitted in cases where there are separate business verticals or partial transfers, subject to proper documentation and justification.

[Ganeshan Kalyani]

Keep the GSTIN of ABC Private Limited Active till you get the recredit. Also, department may not cancel the GSTIN for want of any pending notices or assessment under the said GSTIN.

[Shilpi Jain]

No due date for filing ITC-02 and no restriction on the number of ITC-02 that can be filed.

Time limit for cancellation of registration is 30 days from NCLT order.

One way of doing this is keep the registration active until the re-credit. Would lead to a violation leading to levy of general penalty .

Another option is transfer the 2L and cancel within 30 days, provide the office a copy of merger order and request to re-credit to the resulting entity. If this does not happen or is not possible, based on the re-credit order in existing entity take the credit manually in the resulting entity and in case disputed by department it needs to be justified and fought until its logical end.

May get relief at Tribunal level.

AI Summary

Merger Triggers Complex ITC Transfer Rules with Strategic Registration Management Challenges A private company underwent merger through NCLT order, involving transfer of input tax credit (ITC) balances. Key considerations include filing registration cancellation within 30 days, transferring ITC through ITC-02 form, and addressing pending recredit of Rs. 50,000. Experts recommend keeping the original company's registration active until recredit is completed, with potential strategies for managing tax credit transfer and potential departmental disputes.