GST APPLICABILITY ON PERMANENT TRANSFER /DISPOSAL OF BUSINESS ASSETS

As per Schedule 1 Point No 1

Following activities will be treated as deemed supplies made or agreed to be made without a consideration.

(1)    Permanent transfer

or disposal

of business assets

where input tax credit has been availed

on such assets.

However as per Schedule 2 and Section 7:-

Section 7

Where certain activities or transactions

constitute a supply in accordance with the provisions of sub section (1),

they shall be treated either as

supply of goods or

supply of services as referred to in schedule II

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4. Transfer of business assets

(a)    Where goods

forming part of the assets of a business

are transferred or disposed of

by or under the directions of

the person carrying on the business

so as no longer to form part of those assets,

whether or not for a consideration,

such transfer or disposal is a

supply of goods by the person;

(b)    Where,

by or under the direction of a person carrying on a business,

goods held or used for the purposes of the business are put to any private use

or are used,

or made available to any person for use,

for any purpose other than a purpose of the business, whether or not for a consideration,

the usage or making available of such goods

is a supply of services;

(c)    Where any person

ceases to be a taxable person,

any goods forming part of the assets of any business carried on by him

shall be deemed to be supplied by him in the course or furtherance of his business

immediately before he ceases to be a taxable person, unless—

(i)    the business is transferred as a going concern to another person; or

(ii)    the business is carried on by a personal representative who is deemed to be a taxable person

Notification No 12/2017 Central Tax Rate (Mega Exemption) Dated 28th June 2017

Follwing Supplies are exempt from CGST.

Point No 2

Services by way of transfer of a going concern, as a whole or an independent part thereof.

Thanks

CA Rahul Gupta