Question ID : 35849

Treatment of Stock on Conversion of Company into LLP

What would be the treatment of stock lying in the hands of the company on Conversion of the Private Limited Company into a LLP ? Whether the same has to be as sale in the hands of the company and purchase in the hands of LLP under GST as well ?

You Need not sale-purchase any stock on account of conversion of a Company to LLP. However, you will be allowed to carry forward the Balance in Input Tax Credit Ledger as on the date of Conversion. Refer Section : 18 (3) of the CGST Act, 2017. Setion 18 (3) Where there is a change in the constitution of a registered person on account ofsale, merger, demerger, amalgamation, lease or transfer of the business with the specificprovisions for transfer of liabilities, the said registered person shall be allowed to transfer the input tax credit which remains unutilised in his electronic credit ledger to such sold, merged, demerged, amalgamated, leased or transferred business in such manner as may be prescribed.