Applicability of GST on sale of ongoing concern

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..... Applicability of GST on sale of ongoing concern
Query (Issue) Started By: - Kaustubh Karandikar Dated:- 16-12-2021 Last Reply Date:- 20-12-2021 Goods and Services Tax - GST
Got 4 Replies
GST
1) A Foreign Company is buying a major stake in XYZ(India) under slump sale of ongoing concern arrangement i.e., transfer of a whole of business concern as a going concern. 2) Against this transf .....

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..... er, XYZ will be getting from the foreign company an amount of approx. ₹ 100 Crores. Whether XYZ is required to pay GST on this transaction either under forward charge or reverse charge? In my view it is exempted under Sr.No.2 of Notification No.12/2017- Central Tax (Rate) dt. 28.06.2017 as amended. Views of the experts please. Further to my views on the above, in my view, XYZ will also be r .....

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..... equired to proportionately reverse the ITC being supplying exempted service and also will be required to prepare a Bill of Supply for the amount received from the foreign company and to show the same in the GST Returns under the respective column. Expert's views please. Reply By Shilpi Jain: The Reply: Sale of going concern is not liable to GST. From the perspective of reversal of credit, an .....

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..... y expense incurred for this sale will have to be reversed as per rule 42. Another view is that this going concern sale is not a supply at all and thereby no reversal of credit since it will not be an exempt supply. Reply By Kaustubh Karandikar: The Reply: thanks shilpi ji for your advice. But in my view, since there is a specific entry for the same in the exemption notification, it will be trea .....

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..... ted as exempted supply and reversal as per Rule 42 will be required. Reply By KASTURI SETHI: The Reply: Reversal is not required in respect of goods and services mentioned in Schedule-III, these being not supply. If exempted, reversal is required. Reply By Shilpi Jain: The Reply: @Kaustubh sir - merely because something is exempt does not mean that there is a levy and thereby there is a requir .....

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..... ement of exemption.
Discussion Forum - Knowledge Sharing .....

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