Clarification in respect of transfer of input tax credit in case of death of sole proprietor

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.... for transfer of input tax credit which remains unutilized to the transferee in case of death of the sole proprietor. As per sub-rule (1) of rule 41 of the Delhi Goods and Services Rules, 2017 (hereinafter refined i as 'DGST Rules), the registered persun (transteror of business ) can file FORM GST ITC-02 electronically on the common portal along with a request for transfer of unutilized input tax credit lying in his electronic credit ledger to the transferee. Further, clarification has also been sought regarding procedure of filing of FORM GST ITC-02 in case of death of the sole proprietor. In order to clarify these issues and to ensure uniformity in the implementation of the provisions of the law, the Commissioner, in exercise ....

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....llation of registration on account of death of the proprietor: Clause (a) of sub-section (1) of section 29 of the DGST Act, allows the legal heirs in case of death of sole proprietor of a business, to file application for cancellation of registration in FORMGST REG-16 electronically on common portal on account of transfer of business for any reason including death of the proprietor. In FORM GST REG-16, reason for cancellation is required to be mentioned as "death of sole proprietor". The GSTIN of transferee to whom the business has been transferred is also required to be mentioned to link the GSTIN of the transferor with the GSTIN of transferee. Transfer of innut tax credit and liability: In case of death of sole proprietor, if t....

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....t tax credit lying in his electronic credit ledger to the transferee, in the event of sale, merger, de-merger, amalgamation, lease or transfer or change in the ownership of business for any reason. In case of transfer of business on account of death of sole proprietor, the transferee / successor shall file FORM GST ITC-02 in respect of the registration which is required to be cancelled on account of death of the sole proprietor. FORM GST ITC-02 is required to be filed by the transferee successor before filing the application for cancellation of such registration. Upon acceptance by the transteree / successor, the un-utilized input tax credit specified in FORM GST ITC-02 shall be credited to his electronic credit ledger. It is reque....