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

Aashok Kumar Sharma

Aashok Kumar Sharma

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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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