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ITC credit in case of marger of partnership firms

Gangeshwar (proprietor) (136 Points)

11 August 2020

Dear All,

Two partnership Firms got merged on 30.09.2019 and currently carrying on the business under the name of the transferee firm itself. Now the query is:

1. Will the transferee firm have to take fresh registration. There is one additional partner.Or the existing certificate will work

2. is there any time period for filing ITC 02

3. Is there any issues for availing ITC by the transferee firm, specially ITC on assets

4. In whose books ITC as on 31.03.2020 be shown. If its shown in the books of transferee, as all assets & liabilities have been transferred, will there be any problem. Even transferor firm is no longer in existence but ITC 02 has not been filed.

Please suggest.

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2 Replies

Pankaj Rawat (GST Practitioner) (55052 Points)
Replied 15 August 2020

1. No need to take fresh registration. the merger can be done existing GSTN.

2. As such No. In term of rule 41 ,In case of Merger , Transferor is required to file ITC 02 .

3. The ITC lying in Credit Ledger of Transferor will get Transfered to Transferee's Credit Ledger (Only when ITC 02 filed & accepted).

4. It's strictly being prescribed in Rule 41 , in event of change of ownership of business by merger the ITC 02 need to be furnish to get credit ledger balance transfered into Transferee firm.
So there would be no problem except the balance in Credit Ledger of Transferor will get lapsed.