Rule 41 of CGST Rules 2017: Transfer of Credit on Sale, Merger, Amalgamation, Lease or Transfer of a Business

Provisions under Rule 41 of the Central Goods and Services Tax (CGST) Rules, 2017 relating to “Transfer of Input Tax Credit (ITC) on Sale, Merger, Amalgamation, Lease or Transfer of a Business”, are as under:

CGST Rule 41: Transfer of Credit on Sale, Merger, Amalgamation, Lease or Transfer of a Business (Chapter-V: Input Tax Credit)

(1) A registered person shall, in the event of sale, merger, de-merger, amalgamation, lease or transfer or change in the ownership of business for any reason, furnish the details of sale, merger, de-merger, amalgamation, lease or transfer of business, in FORM GST ITC 02, electronically on the common portal along with a request for transfer of unutilized input tax credit lying in his electronic credit ledger to the transferee:

Provided that in the case of demerger, the input tax credit shall be apportioned in the ratio of the value of assets of the new units as specified in the demerger scheme.

Explanation:- For the purpose of this sub-rule, it is hereby clarified that the “value of assets” means the value of the entire assets of the business, whether or not input tax credit has been availed thereon.

(2) The transferor shall also submit a copy of a certificate issued by a practicing chartered accountant or cost accountant certifying that the sale, merger, de-merger, amalgamation, lease or transfer of business has been done with a specific provision for the transfer of liabilities.

(3) The transferee shall, on the common portal, accept the details so furnished by the transferor and, upon such acceptance, the un-utilized credit specified in FORM GST ITC 02 shall be credited to his electronic credit ledger.

(4) The inputs and capital goods so transferred shall be duly accounted for by the transferee in his books of account.

Amendments History:

1. Explanation to sub-rule (1) inserted vide Notification 16/2019 Central Tax dt. 29/03/2019.

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It may be noted that the above information is based on CBIC's Updated Compilation of CGST Rules 2017 (as notified/ amended upto 01/06/2021). However, for detailed/ official information and/ or subsequent updates, please refer relevant Notifications. E&OE

Further, it may be noted that Rules 27 to 138 (pertaining to various Chapters) of the CGST Rules, 2017 were initially notified by CBIC, along with the applicable Forms, vide Central Tax Notification 10/2017 dt. 28/06/2017: CGST (2nd Amendment) Rules, 2017, applicable w.e.f. 01/07/2017 (or as specified in respective Rules).

CBIC Updates (GST)
GST Circulars, Notifications, Press Releases, Orders, etc. issued by the Central Board of Indirect Taxes & Customs (CBIC) in different years, along with Section-wise/ Rule-wise Text of GST Acts/ Rules:
CGST: CGST Act/ Definitions, CGST Rules
IGST: IGST Act/ Definitions, IGST Rules
UTGST: UTGST Act/ Definitions, UTGST Rules
CBIC Circulars (CGST/ IGST/ UTGST): 2021, 2020, 2019, 2018, 2017
CBIC Central Tax (CGST) Notifications: 2021, 2020, 2019, 2018, 2017
CBIC Central Tax Rate (CGST Rate) Notifications: 2020, 2019, 2018, 2017
CBIC Integrated Tax (IGST) Notifications: 2020, 2019, 2018, 2017
CBIC Integrated Tax Rate (IGST Rate) Notifications: 2020, 2019, 2018, 2017
CBIC UT Tax (UTGST) Notifications: 2020, 2019, 2018, 2017
CBIC UT Tax Rate (UTGST Rate) Notifications: 2020, 2019, 2018, 2017
CBIC Compensation Cess Notifications: 2020, 2019, 2018, 2017
CBIC Compensation Cess Rate Notifications: 2020, 2019, 2018, 2017
CBIC Orders (CGST/ IGST/ UTGST): 2020, 2019, 2018, 2017
CBIC Press Releases: 2020, 2019, 2018, 2017
Note: For Official/ updated copy, please visit the CBIC website.

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  1. Pawan saraswat
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