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GST ITC REFUND CLAIMS CLOSURE OF BUSINESS

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Mohanraj J

781 Points Posted on 02 April 2021

Dear Friends,

What are the procedures to get available ITC refund in case of closure of business? How many days it will take? refund mode DD or NEFT to Tax Payer's bank account? Is it possible to transfer the balance ITC to another new entity (am partner for that entity)

Replies (3)

Quick Summary

When closing a business, you generally cannot claim a refund for unused Input Tax Credit (ITC). Instead, you must pay GST on any closing stock. For service-based businesses without stock, like the one discussed, ITC on capital expenditures (e.g., machinery) typically cannot be refunded upon closure. Excess ITC may lapse, and all closure details must be filed in the final GSTR-10 return.

CA. Sourav Sarkar

Chartered Accountant

16188 Points Posted on 02 April 2021

There is no such procedure as refund of ITC at closure of business . Rather ,you have to pay tax on any closing stock ( raw material or finished goods ) that you have at your principal or additional place of business . You can use your ITC to discharge that liability . Excess ITC would lapse . All stock details have to mentioned in last return that you would file ( GSTR-10).

Mohanraj J

781 Points Posted on 02 April 2021

Sourav Bhai, this is service providing business, so there is no any stock. We have ITC against capex ( JCB machine )Purchases about 10 Lakhs.

Mujeeb Doi

171 Points Posted on 02 April 2021

According to me, refund of ITC from ECL is available only in selected prescribed cases, and the refund of the same is not available at the time of closure of business