GST liability in case of Transfer of Business

By | October 23, 2016

GST liability in case of Transfer of Business

Section 108 of Model GST law of India covered Liability in case of transfer of business

Transfer of Business

Where any person liable to pay tax, transfers his business in whole or part, by sale, gift, lease, leave and license, hire, or in any other manner, then such person and the  person to whom the business is transferred shall jointly and severally be liable to pay the tax, interest or penalty due from the taxable person up to the time of such transfer, whether such dues has been determined before such transfer, but has  remained unpaid or is determined after such transfer.

The liability of transferee shall be automatic irrespective of :

  1. Consideration
  2. Mode and manner of transfer
  3. Transfer in whole or part
  4. Determination or not of liability

The only pre-requisite is that such tax liability should have remained unpaid or is   determined after such transfer.

The transferee or lessee shall be jointly and severally liable to pay –

  • Tax
  • Interest
  • Penalty

due from or payable by such payable person (transferor)

The transferee may carry on business in his own name or some other name. He shall–

  1. get his certificate of registration amended appropriately within prescribed time.
  2. pay GST w.e.f. date of transfer on taxable supply of goods and / or services

Business transfers covered under section 109 would inter alia include  –

  1. Sale,
  2. Gift,
  3.  Lease,
  4.  Leave and license
  5.  Hire, or
  6.  In any other manner (e.g. , exchange, rental, disposal etc.)

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.)

Free Education Guide on Goods & Service Tax (GST)


SR No

Topic -GST

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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