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GST on slump sale, Goods and Services Tax - GST

Issue Id: - 115499
Dated: 6-10-2019
By:- VENKAT S
GST on slump sale

  • Contents

GST will attract on slump sale for transfer of business assets. On the other hand, as per the definition of CGST Act supply definition includes all transaction with the exception of the transfer of business as going concern concept. However the transfer of business as a going concern concept is a service as per the provision of CGST Act with the exception that this service is exempt as per the notification.

We kindly request you clarify the same about our understanding on GST

CA S Venkata Subrahmanyam

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Posts / Replies

Showing Replies 1 to 3 of 3 Records

1 Dated: 6-10-2019
By:- Ganeshan Kalyani

GST is exempt on slump sale.


2 Dated: 7-10-2019
By:- atul rathod

Slump sale as going concern would be treated as supply of service and in rate notification for service as going concern is taxed at nil rate. Therefore there is no gst on slump sale.


3 Dated: 7-10-2019
By:- KASTURI SETHI

Yes. Exempted vide Notification No.12/17-CT(Rate) dated 28.6.17 (serial no.2) I further add as under :-

The "supply of a going concern" is exempted from GST subject to the fulfillment of the following conditions:-

(i) The sale is for consideration.

(ii) The purchaser is registered or required to be registered for GST.

(iii) The parties (seller and purchaser) have agreed in writing that the supply is of a going concern.

(iv) Both the parties must enter into an agreement known as a "sale of business contract", on or before the date of the transfer of the going concern business. This means that a written agreement cannot be entered into after the business has been transferred to the purchaser.

(v) The agreement must specify that the supply (i.e. the business) is a going concern before the contracts are exchanged. This is ultra-crucial point because it shows that all concerned parties clearly acknowledge that the business is actually a going concern.

Two decisions of AARs are given below (One is in favour of the assessee and other is in favour of the Department. So precautions have to be taken.

2019 (24) G.S.T.L. 480 (A.A.R. - GST) = 2019 (4) TMI 1499 - AUTHORITY FOR ADVANCE RULINGS, UTTARAKHAND IN RE : INNOVATIVE TEXTILES LTD.

2019 (20) G.S.T.L. 679 (A.A.R. - GST) = 2018 (12) TMI 767 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA IN RE : MERCK LIFE SCIENCE PRIVATE LIMITED


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