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Transfer of ownership

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Hitesh rawal

284 Points Posted on 07 August 2020

Transfer of ownership from mother to son mother still alive under what section can it be transferred and what about closing stock should i pay tax or take credit after transfer to new firm. impact on GST no.

Replies (3)

Quick Summary

This discussion explains how to transfer business ownership from a mother to her son while she is still alive, specifically addressing GST implications. Section 22(3) of the CGST Act permits such transfers, and Notification 12/2017 CT(r) exempts this business transfer from GST. The process involves obtaining a new GSTN for the son under 'transfer/succession of business' and surrendering the mother's GSTN due to 'change in constitution'. Any available Input Tax Credit (ITC) can be transferred by filing Form ITC-02 before surrendering the old GSTN, meaning no tax needs to be paid on the closing stock.

Pankaj Rawat

GST Practitioner

29904 Points Posted on 07 August 2020

As per Section 22(3)of CGST Act , the ownership or business can be transfer from Mother to Son .
As per Notification 12/2017 CT (r) , such transfer of business is Exempted in GST hence no GST attracts.

Thus apply new GSTN in Son's name & provide reason for obtaining Registration choose " transfer/Succussion of Business" therein.
& surrender mother GSTN & provide reason of surrender " Change in Constitution" thereafter provide the GSTN of Son"s therein.

Note : if any balance is lying in Electronic Credit Ledger can be transfer to Son"s GSTN by filing ITC 02 .
So before surrender file ITC 02 from Mother"s GSTN & accept the same in Son's GSTN.

No need to pay tax on Stock .