GST Liability in case of Amalgamation or merger of companies

By | October 23, 2016
(Last Updated On: October 23, 2016)

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GST Liability in case of Amalgamation or merger of companies

Section 109 of Model GST law of india cover liability in case of amalgamation / merger of companies

With effect from the date of order of merger or amalgamation of two or more  companies, the liability to pay tax, interest and penalty for the period thereafter shall  be of entity which emerges after such merger or amalgamation, as the case may be.

Mergers and amalgamation of companies are governed by section 232 to 234 of the Companies Act, 2013.

When two or more companies are amalgamated or merged by the order of court or of Tribunal or of the Central Government and the order is to take effect from a date earlier to the date of the order and any two or more of such companies have supplied or received any goods and/or services to or from each other during the period commencing on the date from which the order takes effect till the date of the order, then such transactions of supply and receipt shall be included in the turnover of supply or receipt of the respective companies and shall be liable to tax accordingly. Thus, till the date of order of merger or amalgamation is pronounced, companies under the scheme shall be treated as distinct companies and shall be liable to discharge respective tax liabilities.

In case of merger and amalgamation, the scheme may fix an ‘appointed date’ for  such merger or amalgamation and the Court / Tribunal order may be on a different  date. The actual date of order and effective date may not be the same. The two or more companies shall be treated as distinct companies for the period up to the date of the said order and the registration certificates of the said companies shall be cancelled, where necessary, with effect from the date of the said order.

Chapter XXII of the Model GST Law contains Chapter XXII comprising of sections 108 to 115 which deal with liability to pay GST in eight special cases as follows :

Section

 

Liability

108 Liability in case of transfer of business
109 Liability in case of amalgamation / merger of companies
110 Liability in case of company in liquidation
111 Liability of partners of firm to pay tax
112 Liability of guardians, trustees etc
113 Liability of Court of Wards etc.
114 Special provision regarding liability to pay tax in certain cases (death, discontinued business, hindu undivided family or association of persons, on partition, dissolution of firm, termination of guardianship or trust etc).
115 Liability in other cases (discontinued business of HUF, firm, AOP; change in constitution of firm or AOP etc.)

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Resources

1

Model GST Law

Model GST Law

2

GST Overview

Goods and Services Tax (GST): An Overview

Integrated Goods & Service Tax (IGST) Act Overview

Meaning and Scope of Supply

Time of Supply

Place of Supply of Goods and Service under GST

Valuation in GST

Levy of GST & Exemption from Tax

Job Work under Goods & Service Tax (GST)

Electronic Commerce under Goods & Service Tax (GST)

3

Transition to GST

Transitional Provisions in Goods & Service Tax (GST)

4

Registration

GST Registration FAQ’s

GST Registration Process -Video

GST -Draft Registration Rules

GST -Draft Registration Formats

5

Invoice

GST Draft Invoice Rules released by CBEC

GST Draft Invoice formats Released by CBEC

6

Input Tax Credit

Input Tax Credit under Goods & Service Tax (GST)

Concept of Input Service Distributor in Goods & Service Tax (GST)

7

Payment

GST Payment of Tax

GST Draft Payment Rules Released by CBEC

GST Draft Payment formats Released by CBEC

8

Refunds

Refund under GST

Draft GST Refund Forms released by CBEC

Draft GST Refund Rules released by Govt

9

Returns

Returns Process and matching of Input Tax Credit under GST

Draft GST Return Rules Released by Govt

Draft GST Return Formats released by Govt

10

Assessment and Audit

Assessment and Audit under GST

11

Inspection, Search, Seizure and Arrest

Inspection, Search, Seizure and Arrest under GST

12

Offences, Penalty, Prosecution & Compounding

Offences, Penalty, Prosecution & Compounding in GST

13

Demands and Recovery

Demands and Recovery under GST

14

Appeals and Review

Appeals, Review and Revision in GST

15

Advance Ruling

Advance Ruling in Goods and Service Tax (GST)

16

Settlement Commission

Settlement Commission in Goods and Service Tax (GST)

17

GST Portal

Frontend Business Process on GST Portal

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