take over of business

[RAM AVTAR]

what is the procedure of take over of registered proprietory business by registered privte limited company.  what will be treatement of vat credit carry forward

AI Summary

Transferring Business to Private Limited? No Capital Gains Tax if Section 47(xiv) is Complied; VAT Rules Vary. A forum participant inquired about the procedure for a registered proprietary business's takeover by a private limited company, specifically regarding VAT credit carry forward. A Chartered Accountant responded, explaining that from an income tax perspective, transferring assets and liabilities would not trigger capital gains tax if Section 47 clause (xiv) is complied with. Regarding VAT, the procedure varies by state. Generally, the VAT Registration Certificate must be canceled, and a new one obtained. In some states, a VAT credit refund is required, while others allow amendments to the existing certificate to continue the VAT credit.