GST & IT compliance of transfer of Gratutity by employer from one firm to another company.

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This discussion addresses the GST and Income Tax compliance requirements when an employer transfers employees, along with their gratuity liability, from a partnership firm to a newly established private limited company. Both entities are considered related parties due to shared directorship. The advice provided suggests that no GST or income tax is applicable on such transfers within group companies, provided the new company obtains its own PAN and GST registration.

SARATH KURIAN

SARATH KURIAN (Querist)

26 September 2022 Dear Sir/Madam,

We started a new private limited company. We also transfer few employees from partnership company to new private Ltd co. But both are different entities. May I know the legal compliance of both GST and Income Tax issues regarding this transfer.

Thanks & regards

CMA.Sarath Kurian

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

26 September 2022 New PAN and GST registration required for the private company.

SARATH KURIAN

SARATH KURIAN (Querist)

28 September 2022 Sir,

I would like to know GST & IT compliance for the transfer of gratuity liability from one entity (firm) to another company. Both entities are a related party(directors are the same) not a holdding co or sister company.

Please advise.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

28 September 2022 No GST or income tax applicable on such transfer within group companies.

SARATH KURIAN

SARATH KURIAN (Querist)

29 September 2022 Thanks you Seetharaman Sir for your great advice

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

29 September 2022 You are welcome..........

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