2019-VIL-177-ALH

SGST Advance Ruling Authority

GST – Maharashtra AAR - Section 7(1), 18(3), 25(4) of the CGST Act, 2017 – Scope of supply - Applicant has two GST registrations in the State of Maharashtra - Applicant wishes to merge both the GST registrations by way of transfer of the business of Nagpur registration with Akola registration, without consideration and continue with one registration only - Whether the transaction of transfer of business by way of merger of two GST registrations/ distinct persons would constitute ‘supply’ under the GST law – Whether merger between distinct persons would qualify as ‘transfer of business as going concern’ under the purview of GST Law - Whether the transaction of transfer of business by way of merger of two GST registrations/ distinct persons would constitute ‘supply of services’ under the GST law - HELD - as per Sr. No. 1 of Schedule I to the CGST Act, ‘Permanent transfer or disposal of business assets where input tax credit has been availed on such assets will be treated as supply even if made without consideration’ – in view of Part 4(c) of Schedule II of the CGST Act, there is a rendering of ‘supply’ in the subject case | Whether the transaction of transfer of business by way of merger of two GST registrations/ distinct persons would constitute ‘supply of goods’ under the GST law – HELD - change in constitution of the business is essential otherwise, it cannot be said that there is transfer of business as a going concern – the establishments of a person with separate registrations within the same State/UT are considered as “distinct person” - in the subject case, since both the units of applicant are holders of the same PAN and they are merely distinct persons, the case at hand doesn’t qualify to be a “going concern to another person” - in view of statutory provisions of Section 18(3), the change in constitution of the business is essential otherwise, it cannot be said that there is transfer of business as a going concern - the provisions of Para 4(c) of Schedule II of CGST Act, 2017 do not apply in this case - the impugned supply will be treated only as supply of goods and therefore there is no supply of services in the instant case | Whether Nagpur registration can file Form GST ITC-02 and transfer unutilized credit balance to Akola registration – HELD - Answered in the negative

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