许多企业出于各种原因和目的改变其结构，例如为了改善经营颓势、提升企业价值或增强市场竞争力。近年来，在新冠疫情危机之后，由于持续亏损或难以维持经营，越来越多的企业进行了重组。
企业也可能因多种原因而终止，例如业主/合伙人去世导致法人实体解散、有意关闭商号/公司、将业务转让给他人等。
企业终止可以通过以下方式进行：-
在本文中，我们致力于分析GST（商品及服务税）影响在不同形式的企业终止/转让中的体现。
这种形式的企业终止通常发生在个人出售其所有库存和资产，随后关闭业务的情况下。
在此类情况下，由于库存和资产是在正常业务过程中出售的，因此必须在供应时按适用税率缴纳 GST。此外，由于在业务关闭时没有发生货物供应，因此该环节不适用 GST。
如果在终止前清算了所有库存和资产，由于各种原因，电子信用账簿中可能会留有余额，例如亏本销售库存、所经营商品的 GST 税率下调（例如，采购库存时适用 18% 的 GST，后来降至 12% 等）。
在此类情况下，电子信用账簿中的余额不予退还，相关人员可以继续注销其 GST 注册号。
这种情况通常发生在因业主去世导致业务终止，进而将整个业务转让给业主的法定继承人/继任者时。
在这种情况下，法定继承人可以通过转让资产和负债来继续经营已故业主的业务。如果选择继续经营，法定继承人应获得新的 GSTIN，并可将已故业主电子信用账簿中的 ITC（进项税抵免）转移至其 GSTIN。法定继承人还应承担已故业主的 GST 债务。
如果选择终止业务，法定继承人应在已故业主 GST 注册注销之日，就持有的库存或资本货物缴纳 GST。
以总价对价转让包含所有资产和负债的业务，即未对每项资产和负债分别定价的交易，被称为整体出售（Slump sale）。
关于以总价对价转让业务应被视为“货物销售”还是“服务销售”的问题，自始以来一直存在争议，并已就此问题寻求了多项预先裁定。
Same question was placed before the Hon'ble Authority of Advance Ruling (“AAR '') of Karnataka in the matter of M/s Rajashri Foods Private Limited (ARN. KAR ADRG 06/2018 dated 23rd April, 2018).
Hon’ble AAR held following points:
Schedule II read with Section 7(1)(d) of CGST Act, 2017 provides that “Activities or Transactions to be treated as Supply of Goods or Supply of Services”.
Entry No. 4(c) of Schedule II of CGST Act, 2017 is reiterated for ready reference:
“ 4 Transfer of business asset
(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
Therefore, as per Entry No. 4(c) of Schedule II, transfer of goods forming part of business shall be considered as “Transfer of Business Asset” where such person ceases to be a taxable person. However, this provision shall not apply where business is transferred on a going concern basis.
In case of slump sale, the entire business is transferred on a going concern basis. Therefore, such transfer is not to be considered as “Transfer of Goods”
Notification No. 12/2017-Central Tax(Rates) dated 28th June, 2017 contains a list of services exempted which are exempted under GST. Entry No. 2 of such notification is reiterated below:
Therefore, as per Entry No. 2 of N/No. 12.2017-Central Tax (Rates), Transfer of business on going concern basis is considered as “Supply of Service” which is exempt.
Hon’ble Authority of Advance Ruling, Uttrakhand, defined term “Going Concern” in the matter of M/s Rajeev Bansal & Sudershan Mittal (Ruling No. 09/2019-20 dated 9th January, 2020) as:
“7.5 ...In terms of Financial Transaction “Going Concern” has the meaning that at the point in time to which the description applies, the business is live or operating and has all parts and features necessary to keep it in operations. Thus “Transfer of a going concern” in a simple way can be described as transfer of running business which is capable of being carried on by the purchaser as an independent business.”
Therefore, if a business is transferred on a going concern basis then such a transaction is considered as “Supply of Service”.
Similar stands are also taken by various other AARs.
As per N/No. 12/2017-Central Tax (Rate), supply of business on going concern basis is exempted from payment of GST without any condition.
In case of slump sale, if business is transferred on a going concern basis then the same shall be considered as “Exempted Supply”.
As discussed above, as per Section 18(3) of CGST Act read with Rule 41 of CGST Rules, balance in Electronic Credit Ledger of the transferor can be transferred to through filing of Form GST ITC-02 by transferor on GST portal subject to fulfillment of other conditions discussed above.
In case of transfer of the whole business, the transferor is entitled to transfer the entire balance of unutilized ITC lying in the Electronic credit ledger to the transferee. However, In case of partial transfer of business, e.g. demeger or sale of segment only, transferor is eligible to transfer only proportional ITC pertaining to the segment transferred,
As per the Rule 41 of CGST Act, 2017, the ITC shall be apportioned in the ratio of value of transferred assets with the total value of Assets. The same can be understood by the following formula:
ITC entitled for transfer = ITC balance * Value of Assets which is transferred / Total Value of Assets
In case of Itemised sales, the entire business is not transferred to any person, rather few assets are transferred and where the value is assigned to each asset.
Entry No. 4(a) of Schedule II of CGST Act, 2017 is reiterated below:
“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, such transfer or disposal is a supply of goods by the person;”
Therefore, as per Entry No. 4(a) of Schedule II of CGST Act, transfer of business assets is considered as “Supply of Goods” and GST on the same shall be charged at the applicable rate.
Also, as there is no transfer of business taking place, therefore, there is no provision given for transfer of unutilised balance in Electronic Credit Ledger.
Therefore, in case of closure of business or dissolution of business due to death of proprietor or winding up of Company, mere surrendering a GST registration is not sufficient. Cancellation of GST registration does not put an end to liabilities of any person and appropriate action can be taken against such person in future date. Therefore, before surrendering GST registration, a person is required to look after all possible GST liability and applicable compliances.
