GST input tax credit transfer faces uncertainty in business restructuring, cross-State mergers, and registration cancellation rules.
Section 18(3) of the CGST Act permits transfer of input tax credit in cases of merger, demerger, amalgamation, sale, lease, or transfer of business, subject to transfer of liabilities, and Rule 41 provides the Form ITC-02 mechanism. However, business restructuring raises unresolved issues where operations are shifted across States, mergers involve different State registrations, or the transferor's GST registration is sought to be continued after NCLT approval. The article highlights judicial divergence, portal restrictions without statutory basis, and the need to distinguish between transferable IGST and CGST credit and State-specific SGST credit. (AI Summary)

Business nexus in GST: employee infrastructure may determine entitlement to input tax credit on captive utility supplies.
The key issue is whether electricity and other township utilities supplied by an industrial unit are part of its taxable business activities and therefore eligible for Input Tax Credit, or whether they are non-business welfare supplies requiring ITC reversal under Rules 42 and 43. The controversy also turns on whether Explanation 1(d) to Rules 42 and 43 is clarificatory or a substantive, prospective amendment, and on the appropriate functional test for determining business nexus under GST. (AI Summary)