top of page
Writer's pictureMukul gupta

GST: Change in Constitution of the Business is Essential to constitute ‘going concern’ u/s 18, rules


The Maharashtra Authority of Advance Ruling ( AAR ) has held that change in the constitution is essential to constitute going concern u/s 18 of CGST Act 2017


The applicant M/S Crystal Crop Protection Limited, the Applicant, has two GST registrations in the State of Maharashtra. The Applicant wishes to merge both the GST registrations by way of transfer of the business of Nagpur registration with Akola registration without consideration and has submitted that the impugned merger transaction, as a going concern, is a supply of services.


The Applicant contended that if the activities of the business are continuous and uninterrupted & operations being carried out on a regular basis, then the transfer of business ongoing concern is “running business” which is capable of being carried on by the purchaser.


It was contended that M/S Crystal Crop Protection Limited, Nagpur and M/S Crystal Crop Protection Limited, Akola, are holders of the same PAN and they are merely distinct persons. Hence, the case at hand doesn’t qualify to be a “going concern to another person” as units are holders of the same PAN and they are merely distinct persons.


It was observed that u/s Section 18, the change in the constitution of thebusiness is essential otherwise, it cannot be said that there is the transfer of a business as a goingconcern.Further, as per Sr. No. I of Schedule I to the CGST Act, ‘Permanent transfer or disposal of business assets where input tax credit has been availed on such assets will be treated as supply even if made without consideration.


MAAR consist of Shri. Rajiv Magoo, Member Central Tax and Shri. T. R. Ramnani, Member State Tax in light of the case of M/S Shilpa Medicare Limited has held that the activity is a going concern and classified it to be a supply of service.



1 view0 comments

Comments


bottom of page