No GST exemption on transfer of business: AAAR

  • Blog|News|GST & Customs|
  • 2 Min Read
  • By Taxmann
  • |
  • Last Updated on 22 March, 2022

Recent Posts

News, Blog, Insolvency and Bankruptcy Code

Interim Moratorium Barred Continuation of Proceedings u/s 138 of NI Act Against Petitioner Due to IBC’s Overriding Effect | HC

Blog, News, FEMA & Banking

Borrower’s Right to Redeem Secured Asset Ends on Publication of Notice u/s 9(1) of SI Rules, Not After Sale Completion | SC

Latest from Taxmann

Transfer of business; Going concern; Distinct persons; Exemption; GST; Authority for Advance Rulings; AAR

Case Details: Appellate Authority for Advance Ruling, Andhra Pradesh Shilpa Medicare Ltd., In re - [2022] 136 taxmann.com 221 (AAAR - Andhra Pradesh)

Judiciary and Counsel Details

    • Peeyush Kumar and Naresh Penumaka, Member

Facts of the Case

The applicant was intending to transfer whole business as a going concern to a distinct person where both were holders of same PAN. It filed an application for advance ruling to determine taxability of transaction of transfer of whole business between distinct persons and the Authority for Advance Ruling held that such transfer of whole business would amount to supply of services and exempted under GST. The department filed appeal before the Appellate Authority for Advance Ruling and challenged the decision.

AAR Held

The Appellate Authority for Advance Ruling observed that the establishments of a person with separate registrations whether within the same State/UT or in different States/UTs are considered as ‘distinct person.’ As per Part 4 (c) of Schedule II of the CGST Act, 2017, the transfer of business assets shall be treated as supply of services if the business is transferred as a going concern to another person. In the instant case, transfer of business assets would not qualify to be a ‘ transfer as going concern to another person’ as transfer was between distinct persons. Hence, it would be treated as deemed supply of goods and GST exemption would not be available.

Case Review

List of Cases Referred to

Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.

Leave a Reply

Your email address will not be published. Required fields are marked *

«
»

Everything on Tax and Corporate Laws of India

To subscribe to our weekly newsletter please log in/register on Taxmann.com

Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied