Page 10 - Banking Finance May 2019 N

GST UPDATE

GST

NEWS
NEWS
NEWS
NEWS
NEWS

GST authority clarifies on change or transfer in own- GST Circular for new reg-
ership of business istration

The GST (Goods & Services Tax) Authority made it clear that transfer or change In a circular related to verification of
in the ownership of business will include applica-
transfer or change in the ownership of tions for
business due to death of the sole propri- grant of
etor. Accordingly, a mechanism has been new regis-
specified for transferring unutilised input tration, the
tax credit. CBIC said

A circular issued by the Central Board of there have
Indirect Taxes and Customs (CBIC) men- been instances when registration
tioned that the transferee or the succes- gets cancelled due to one reason or
sor, will be liable to be registered with effect from the date of such transfer or any other reason, such businesses
succession, where a business is transferred to another person for any reasons, prefer to apply for new registration
including death of the proprietor. Here the applicant will be required to men- rather than applying for revocation
tion the reason to obtain registration as 'death of the proprietor,' in the regis- of cancellation of registration. There
tration form (GST REG-01) to be filed electronically in the common portal. is possibility that such person might
not have furnished requisite returns
The legal hire (of the dead sole proprietor) will be required to give application
for cancellation of the existing registration. The GST Identification Number and not paid tax for the tax periods
(GSTIN) of transferee to whom the business has been transferred is also required covered under the old/cancelled reg-
to be mentioned to link the GSTIN of the transferor with the GSTIN of trans- istration.
feree. In case of death of sole proprietor, if the business is continued by any Further, such persons would be
person being transferee or successor of business, it shall be construed as trans- required to pay all liabilities due
fer of business. This means transfer of unutilised input tax credit and liability to from them for the relevant period in
pay tax along with penalty, if any, will also be possible. case they apply for revocation of
cancellation of registration. Hence,
In case of transfer of business on account of death of sole proprietor, the trans-
feree / successor will file 'FORM GST ITC-02' in respect of the registration to be to avoid payment of the tax
cancelled. Also, such an action is required to be completed before applying for liabilities, such persons may be using
the cancellation. This should be filed before filing the application for cancella- the route of applying for fresh
tion of such registration. Upon acceptance by the transferee/ successor, the registration. One can take separate
unutilised input tax credit specified in 'FORM GST ITC-02' will be credited to his registration on the same PAN in the
electronic credit ledger. same State.

10 | 2019 | MAY | BANKING FINANCE