Transfer of business as a going concern.
This query is : Resolved
29 July 2019
There is change of constitution of business from partnership firm to proprietorship concern.There is no balance available in cash ledger or credit ledger of partnership firm at the time of transfer.What is the procedure to follow in transfer of business? Is the certificate of CA is required ,ITC 02 to be filed or only dissolution of partnership firm is sufficient?
30 July 2019
ITC -02 is required to be filed in case of succession of business if there is a credit to be transferred to transferred business.
30 July 2019
No credit is available to transfer.Then ITC02 is required to file or not? if not what other document required supporting transfer of business?
02 August 2025
If there is **no Input Tax Credit (ITC) balance** to transfer at the time of change of constitution from partnership firm to proprietorship, then:
* **Filing ITC-02 is NOT required**, because ITC-02 is specifically for transferring ITC credit from one registered person to another.
### Procedure to follow in this case:
1. **Dissolution of partnership firm**:
The partnership firm should be formally dissolved as per the partnership deed and legal requirements.
2. **Intimate GST authorities**:
File **application for cancellation of GST registration** of the partnership firm on the GST portal.
3. **Start business under new entity (proprietorship)**:
Proprietorship should apply for fresh GST registration (if not done already).
4. **Supporting documents for transfer of business**:
Although ITC-02 is not required, it is good practice to maintain internal records like:
* Copy of dissolution deed of partnership.
* A statement showing the transfer of assets and liabilities (if any).
* Certificate from CA (optional but recommended) confirming the transfer of business and no ITC balance.
* Communication to tax authorities regarding transfer.
---
### Summary:
* No ITC-02 filing if no ITC balance.
* Dissolution of partnership firm + cancellation of its GST registration.
* Fresh GST registration for proprietorship.
* Maintain proper documentation internally.
---
If you want, I can help you draft a CA certificate or guide you on cancellation filing!
* **Filing ITC-02 is NOT required**, because ITC-02 is specifically for transferring ITC credit from one registered person to another.
### Procedure to follow in this case:
1. **Dissolution of partnership firm**:
The partnership firm should be formally dissolved as per the partnership deed and legal requirements.
2. **Intimate GST authorities**:
File **application for cancellation of GST registration** of the partnership firm on the GST portal.
3. **Start business under new entity (proprietorship)**:
Proprietorship should apply for fresh GST registration (if not done already).
4. **Supporting documents for transfer of business**:
Although ITC-02 is not required, it is good practice to maintain internal records like:
* Copy of dissolution deed of partnership.
* A statement showing the transfer of assets and liabilities (if any).
* Certificate from CA (optional but recommended) confirming the transfer of business and no ITC balance.
* Communication to tax authorities regarding transfer.
---
### Summary:
* No ITC-02 filing if no ITC balance.
* Dissolution of partnership firm + cancellation of its GST registration.
* Fresh GST registration for proprietorship.
* Maintain proper documentation internally.
---
If you want, I can help you draft a CA certificate or guide you on cancellation filing!
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