Compliance Requirements for Continuation of Business After Proprietor’s Demise

[Preeti Gupta]

Dear Sir/Madam,

The proprietor of a jewellery shop passed away in the month of April 2025. At the time of death, the business held a gold jewellery stock of approximately 1.5 kg. There is no balance available in the GST credit ledger.

Out of the three legal heirs—two sons and one daughter—one heir intends to take over and continue the business along with the existing stock and other assets.

We seek your guidance on the applicable compliance requirements under GST and other relevant laws to ensure a smooth transition and continuation of the business.

AI Summary

Business succession under GST requires new registration and cancellation of the deceased proprietor's registration, with liability for outstanding tax.
On the proprietor's death, the deceased's GST registration must be cancelled via Form GST REG-16 and the successor obtain new registration via Form GST REG-01 indicating succession. The transfer qualifies as a transfer as a going concern and is not a taxable supply; absent input tax credit no ITC-02 filing is required. The successor must intimate the jurisdictional GST officer, update regulatory registrations, open a new bank account and preserve succession documentation. The legal heir must file the deceased's final income tax return and remains liable for tax, interest or penalty to the extent provided by statute.