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Is Gst applicable on transfer of stock to in case of sale of business

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Byreddy Venkata sumanth

21 Points Posted on 10 January 2023

Is Gst applicable on transfer of stock to in case of sale of business

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Quick Summary

When a business is transferred as a going concern, including its stock, GST is generally not applicable. This is because the transfer of goods is not considered a supply for GST purposes. Furthermore, the input tax credit can be transferred to the new owner, who will be treated as a taxable person. This exemption is covered under Notification No. 12/2017-CTR, ensuring no GST liability on such business transfers, whether whole or in parts.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

121534 Points Posted on 10 January 2023

If Business is transferred as a going concern by the taxable person to another person (i.e. sale, merger, demerger, amalgamation, transfer of the business) with the specific provisions for transfer of liabilities ... Transfer of goods will not be considered as supply of goods, Transfer shall be allowed to transfer the input tax credit which remains unutilised in terms of Section 18(3) of the CGST Act,2017 read with rule 41 of the CGST Rules,2017. Transferee shall be considered as taxable person under the CGST Act,2017.

In nutsell, as per entry no.2 of Notification No.12/2017-CTR ,”Services by way of transfer of a going concern, as a whole or independent parts thereof “ have been exempted from the GST Tax. So, It may be noted that whether the business is transferred as a whole or in independent parts thereof, both are exempt from the GST Tax Liability.