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GST Query regarding HSN

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Vivek Sunil Mule

Chartered Accountant

75 Points Posted on 31 August 2021

Sir / Madam,

One company is purchasing Assets of other running company consisting, Technical knowhow, Machinery and Inventory.

What will be HSN code and rates will be applicable?

Please note there is no takeover / merger / transfer of business is involved.

Replies (3)

Quick Summary

This discussion addresses a query regarding Goods and Services Tax (GST) Harmonised System of Nomenclature (HSN) codes. The user is asking about the appropriate HSN codes and applicable rates when a company purchases assets, technical knowhow, machinery, and inventory from another running company, specifically noting that it's not a takeover or merger. The response clarifies that GST rates and HSN codes will generally align with those of new assets, with a specific note on vehicles and the applicability of profit margin versus transaction value based on Input Tax Credit (ITC) claims. Further questions are raised about the HSN code for technical knowhow and surfboards.

Pankaj Rawat

GST Practitioner

29904 Points Posted on 31 August 2021

The GST rate & HSN will be the same that of new Assets.

Only in case of Vehicles (Reference Notification 8/2018 CT (r) :
Vehicle of Vat Regime Sold in GST Regime :
GST is applicable on Profit Margin (Sale-Puchase )

Vehicle Purchased & Sold in GST Regime :
If ITC claim , then GST is on transaction Value
If ITC is not claim , then GST is on Profit Margin (Sale - Purchase)

GST Rate 12 % & 18% is applicable as per CC engine of vehicle mentioned in Notification.
More then 1500 CC , leanth exceeding 4000 MM, GST is 18%

Else ,.. 12%