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Death of composition dealer

02 July 2021

composition dealer died in may 2021 and his legal heir applied registration in regular mode how ITC of closing stock transferred to legal heir business

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6 Replies

Pankaj Rawat (GST Practitioner) (55052 Points)
Replied 03 July 2021

I doubt that in this case whether you can file ITC 02 to claim ITC on stock .
Because the as the Registration was obtain on death of proprietor which was under Composition scheme.

So I can suggest that you can try & file ITC 02 .

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auditor ravi (120 Points)
Replied 03 July 2021

Firstly thanks for your reply and I have a doubt ITC 02 is related to electronic ledger input how I can show input of closing stock

CS Advocate Abhishek Goyal (M Com FCS LLB M-AIMA ) (13788 Points)
Replied 03 July 2021

There is no question of input transfer snce the deceased was under composition scheme so obviously there will be no balance in e credit ledger.

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CS Advocate Abhishek Goyal (M Com FCS LLB M-AIMA ) (13788 Points)
Replied 03 July 2021

So far as the transfer of inputs held in closing stock is concerned, it is only available when you withdraw from composition scheme and convert from composition to regular. In your case the situation is different as the existing GSTN has not been converted in to regular business.

Pankaj Rawat (GST Practitioner) (55052 Points)
Replied 03 July 2021

Dear Ravi
yes it was wrongly type ITC 02 instead of ITC 01

In term of Section 18(1)(a) of CGST can file ITC 01 & can claim ITC on Stock.
the section state the person liable for Registration can claim .
Sec 18(1) of the CGST Act prescribes the date when a person is entitled to take Credit in particular circumstances:-

A taxable person who has applied for registration within thirty days from the date on which he becomes liable to registration

is entitled to take Credit of input tax on the day immediately preceding the date from
which he becomes liable to pay tax under the provisions of the CGST Act.

So in above its clearly stating that the person liable for registration (whatsoever reason) can claim ITC on stock.