Transfer of partnership interest in LLP

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Transferring a partnership interest in an LLP is generally considered a supply for GST purposes, not a transaction in securities. However, it may be exempt if it qualifies as a transfer of a going concern or if structured as a capital contribution or share in net assets without direct consideration.

KHUSHI SINGH

KHUSHI SINGH (Querist)

20 August 2025 Can we say that transfer of partnership interest in LLP is transaction in securities and thus, not amounting to ‘supply’ and subject to GST?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

21 August 2025 Yes, GST not applicable, it's ownership transfer not a supply of goods or services.

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

21 August 2025 No, transfer of partnership interest in an LLP cannot generally be treated as a "transaction in securities" under the current legal framework.

🧾 Therefore, it may be treated as a supply under GST, unless:

It qualifies as a transfer of a going concern (exempt under GST), or

Structured in a way that no supply of goods/services occurs (e.g. capital contribution/share in net assets without consideration).

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