{"id":2595,"date":"2025-07-24T11:26:37","date_gmt":"2025-07-24T05:56:37","guid":{"rendered":"https:\/\/www.caclubindia.com\/guide\/?p=2595"},"modified":"2025-07-24T11:31:00","modified_gmt":"2025-07-24T06:01:00","slug":"gst-itc-02","status":"publish","type":"post","link":"https:\/\/www.caclubindia.com\/guide\/gst-itc-02\/","title":{"rendered":"GST ITC-02: How to Transfer Unutilized ITC?"},"content":{"rendered":"\n<p>The Goods and Services Tax (GST) is a unified, multi-stage, destination-based indirect tax applied to the supply of goods and services throughout India. Implemented on <strong>July 1, 2017<\/strong>, it replaced numerous earlier indirect taxes\u2014including excise duty, VAT, service tax, and various state and central cesses\u2014establishing a streamlined tax system often described as &#8220;<strong>One Nation, One Tax<\/strong>.&#8221; This reform simplified taxation by consolidating multiple levies into a single structure.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\r\n<div class=\"ez-toc-title-container\">\r\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\r\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\r\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.caclubindia.com\/guide\/gst-itc-02\/#Form_GST_ITC-02\" >Form GST ITC-02<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.caclubindia.com\/guide\/gst-itc-02\/#When_Is_GST_ITC-02_Used\" >When Is GST ITC-02 Used?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.caclubindia.com\/guide\/gst-itc-02\/#Key_Eligibility_Conditions\" >Key Eligibility Conditions<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.caclubindia.com\/guide\/gst-itc-02\/#Steps_for_the_Transferor_Original_Entity_to_Transfer_ITC_via_Form_GST_ITC-02\" >Steps for the Transferor (Original Entity) to Transfer ITC via Form GST ITC-02<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.caclubindia.com\/guide\/gst-itc-02\/#Log_in_to_the_GST_Portal\" >Log in to the GST Portal<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.caclubindia.com\/guide\/gst-itc-02\/#Navigate_to_ITC_Forms\" >Navigate to ITC Forms<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.caclubindia.com\/guide\/gst-itc-02\/#Prepare_Form_GST_ITC-02_Online\" >Prepare Form GST ITC-02 Online<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.caclubindia.com\/guide\/gst-itc-02\/#Enter_Required_Details\" >Enter Required Details<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.caclubindia.com\/guide\/gst-itc-02\/#Upload_Supporting_Documents\" >Upload Supporting Documents<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.caclubindia.com\/guide\/gst-itc-02\/#Submit_the_Form\" >Submit the Form<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.caclubindia.com\/guide\/gst-itc-02\/#ITC_Adjustment_in_Electronic_Credit_Ledger\" >ITC Adjustment in Electronic Credit Ledger<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.caclubindia.com\/guide\/gst-itc-02\/#Steps_for_the_Transferee_Acquiring_Entity_to_AcceptReject_ITC_Transfer\" >Steps for the Transferee (Acquiring Entity) to Accept\/Reject ITC Transfer<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.caclubindia.com\/guide\/gst-itc-02\/#FAQs\" >FAQs<\/a><\/li><\/ul><\/nav><\/div>\r\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Form_GST_ITC-02\"><\/span>Form GST ITC-02<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>GST ITC-02 is a crucial form used to transfer unutilized Input Tax Credit (ITC) from one GSTIN to another, primarily in cases of business restructuring, such as:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Sale of business<\/li>\n\n\n\n<li>Merger<\/li>\n\n\n\n<li>Demerger<\/li>\n\n\n\n<li>Amalgamation<\/li>\n\n\n\n<li>Lease or transfer of business<\/li>\n\n\n\n<li>Change in ownership of the business<\/li>\n<\/ul>\n\n\n\n<p>This allows the unutilised <strong><a href=\"https:\/\/www.caclubindia.com\/guide\/input-tax-credit\/\">Input Tax Credit<\/a><\/strong> (ITC) of the transferring entity to be carried forward and utilised by the new or acquiring entity, ensuring seamless credit continuity. The procedure is regulated under <strong>Section 18(3) of the CGST Act, 2017<\/strong>, and <strong>Rule 41 of the CGST Rules, 2017<\/strong>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"When_Is_GST_ITC-02_Used\"><\/span>When Is GST ITC-02 Used?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>During the transfer of business through sale, merger, demerger, amalgamation, lease, or any similar event when liabilities are also transferred.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>When unutilized ITC (the credit balance remaining in the electronic credit ledger of the transferor) needs to be transferred to the transferee\u2019s GSTIN.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Key_Eligibility_Conditions\"><\/span>Key Eligibility Conditions<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Both the transferor (old business) and transferee (new business) must be registered under GST.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The transferor should have unutilized matched ITC in the Electronic Credit Ledger.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>A Chartered Accountant\u2019s or Cost Accountant\u2019s certificate confirming the transfer is required.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Steps_for_the_Transferor_Original_Entity_to_Transfer_ITC_via_Form_GST_ITC-02\"><\/span>Steps for the Transferor (Original Entity) to Transfer ITC via Form GST ITC-02<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Log_in_to_the_GST_Portal\"><\/span>Log in to the GST Portal<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Access the official GST portal using valid credentials.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Navigate_to_ITC_Forms\"><\/span>Navigate to ITC Forms<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Go to: <strong>Services \u2192 Returns \u2192 ITC Forms<\/strong>.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Prepare_Form_GST_ITC-02_Online\"><\/span>Prepare Form GST ITC-02 Online<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Click on the \u2018<strong>Prepare Online<\/strong>\u2019 option under the ITC-02 section.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Enter_Required_Details\"><\/span>Enter Required Details<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Provide the <strong>GSTIN, Legal Name, and Trade Name<\/strong> of both the transferor and transferee.<\/li>\n\n\n\n<li>Specify the <strong>amount of ITC to be transferred<\/strong> under each tax head (CGST, SGST, IGST, CESS).<\/li>\n\n\n\n<li>Include the <strong>certificate details<\/strong> from a Chartered Accountant or Cost Accountant.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Upload_Supporting_Documents\"><\/span>Upload Supporting Documents<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Attach the <strong>CA\/Cost Accountant certificate<\/strong> in the prescribed format (PDF\/JPEG).<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Submit_the_Form\"><\/span>Submit the Form<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>File the form using a <strong>Digital Signature Certificate (DSC)<\/strong> or <strong>Electronic Verification Code (EVC)<\/strong>.<\/li>\n\n\n\n<li>Upon successful submission, an <strong>Application Reference Number (ARN)<\/strong> will be generated for tracking.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"ITC_Adjustment_in_Electronic_Credit_Ledger\"><\/span>ITC Adjustment in Electronic Credit Ledger<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The specified <strong>unutilized ITC amount<\/strong> will be <strong>debited from the transferor\u2019s Electronic Credit Ledger<\/strong>.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Steps_for_the_Transferee_Acquiring_Entity_to_AcceptReject_ITC_Transfer\"><\/span>Steps for the Transferee (Acquiring Entity) to Accept\/Reject ITC Transfer<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Log in to the GST portal using valid credentials and access the dashboard.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Go to: <strong>Services \u2192 User Services \u2192 ITC-02 \u2013 Pending for Action<\/strong>.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Review transfer request details such as check the <strong>Application Reference Number (ARN)<\/strong>, transfer amount, and date.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Choose to <strong>accept<\/strong> or <strong>reject<\/strong> the transfer request.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>If accepted<\/strong>, the ITC will be <strong>automatically credited<\/strong> to the transferee\u2019s Electronic Credit Ledger.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>If rejected<\/strong>, the ITC will <strong>remain with the transferor<\/strong>.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"FAQs\"><\/span>FAQs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1753335272112\"><strong class=\"schema-faq-question\">What documents are required to support a GST ITC-02 transfer?<\/strong> <p class=\"schema-faq-answer\">1. <strong>Transfer Agreement or Business Transfer Document:<\/strong> A copy of the agreement, scheme of arrangement, or document evidencing the transfer of business (e.g., merger, demerger, sale, amalgamation, lease, or similar event)<br\/>2. <strong>Certificate from a Chartered Accountant (CA) or Cost Accountant<\/strong><br\/>3.<strong> ITC Ledger Details: <\/strong>Details of the matched ITC available in the Electronic Credit Ledger of the transferor as on the effective date of the transfer<br\/>4. <strong>GST Registration Details:<\/strong> GSTIN, Legal Name, and Trade Name of both the transferor and transferee entities.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1753335372886\"><strong class=\"schema-faq-question\">How does the role of transferor and transferee differ in ITC-02 transfer process?<\/strong> <p class=\"schema-faq-answer\"><img loading=\"lazy\" decoding=\"async\" width=\"1200\" height=\"630\" src=\"https:\/\/www.caclubindia.com\/guide\/wp-content\/uploads\/2025\/07\/ITC-02-transfer-process.png\" class=\"attachment-full size-full\" alt=\"\" style=\"max-width: 100%; height: auto;\" srcset=\"https:\/\/www.caclubindia.com\/guide\/wp-content\/uploads\/2025\/07\/ITC-02-transfer-process.png 1200w, https:\/\/www.caclubindia.com\/guide\/wp-content\/uploads\/2025\/07\/ITC-02-transfer-process-300x158.png 300w, https:\/\/www.caclubindia.com\/guide\/wp-content\/uploads\/2025\/07\/ITC-02-transfer-process-768x403.png 768w\" sizes=\"auto, (max-width: 1200px) 100vw, 1200px\" \/><\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1753335401931\"><strong class=\"schema-faq-question\">Is it possible to transfer ITC after a business merger or sale without time restrictions?<\/strong> <p class=\"schema-faq-answer\">Yes, one can transfer Input Tax Credit (ITC) after a business merger or sale by filing Form GST ITC-02, and there is no statutory time limit under the GST law to do so. The transferor must file ITC-02, and the transferee must accept the transfer for the ITC to move to the transferee\u2019s electronic credit ledger.<br\/>This flexibility is expressly confirmed in multiple sources, which state that neither the GST Act nor the rules prescribe a specific deadline for initiating or completing this process.<\/p> <\/div> <\/div>\n","protected":false},"excerpt":{"rendered":"<p>The Goods and Services Tax (GST) is a unified, multi-stage, destination-based indirect tax applied to the supply of goods and [&hellip;]<\/p>\n","protected":false},"author":6,"featured_media":2597,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center 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center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[6],"tags":[],"class_list":["post-2595","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-gst"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\r\n<title>GST ITC-02: How to Transfer Unutilized ITC? - Tax Guide<\/title>\r\n<meta name=\"description\" content=\"Learn how to file Form ITC\u201102 on the GST portal - eligibility, documentation, filing process, acceptance or rejection steps.\" \/>\r\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\r\n<link rel=\"canonical\" href=\"https:\/\/www.caclubindia.com\/guide\/gst-itc-02\/\" \/>\r\n<meta property=\"og:locale\" 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