Transfer of Input Tax credit on sale, merger, amalgamation, lease or transfer of a business under GST

Rule-41 of CGST rules 2017

41. Transfer of credit on sale, merger, amalgamation, lease or transfer of a business.-

• 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.

• 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
• 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

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