Question ID :
36885
ITC reversal in case of conversion of firm to company
A firm is converting into a company. It will transfer stock to the new company. It has substantial ITC on that stock. As per exemption notification, "Services by way of transfer of a going concern" are exempt services. Will this mean that firm will have to reverse ITC? ITC only on expenses of transfer or entire ITC on stock will have to be reversed?
Posted by
Gaurav S Kenkre
on
Dec 07, 2018
Filed Under
GST
Sec 18 (3) specifically allows for conversion of firm into company where the assets, as well as liabilities, would be transferred. Credit can also be transferred to the new company with intimation to the revenue. This is not under schedule III.
No need to reverse any credit.
Posted by
Madhukar N Hiregange on
Dec 09, 2018