Transfer of business by way of merger of two GST registration on same PAN is not exempted: AAR

Case Details: Authority for Advance Rulings, Maharashtra Crystal Crop Protection Ltd., In re - [2022] 139 taxmann.com 242 (AAR-MAHARASHTRA)

Judiciary and Counsel Details

• • Rajiv Magoo & T.R. Ramnani, Member

Facts of the Case

The applicant was a trader & manufacturer of agrochemical products. It was registered under GST and having two GSTIN in Maharashtra under same PAN. It filed an application of advance ruling to determine whether transaction of transfer of business by way of merger of two GST registrations or distinct persons would be exempted under the GST law.

AAR Held

The Authority for Advance Ruling observed that the change in constitution of business is essential for transaction to be considered as transfer of business as a going concern. The transaction of transfer of business by way of merger would not qualify to be transfer of going concern to another person if units were holders of same PAN and they were merely distinct persons. Hence, the provisions of Para 4(c) of Schedule II of CGST Act, 2017 would not apply in this case. Therefore, the impugned supply would be treated only as supply of goods and exemption under SI. No. 2 of the Notification No. 12/2017-Central Tax (Rate) dated 28th June 2017 shall not be available.

List of Cases Reviewed

• • Shilpa Medicare Ltd., In re [2022] 136 taxmann.com 221 (AAAR – Andhra Pradesh) (para 5.5.7) followed.

List of Cases Referred to

• • State of Tamil Nadu v. T.M.T. Drill (P.) Ltd. [1991] 82 STC 59 (Mad.) (para 2.6.1)
  • Rajashri Foods (P.) Ltd., In re [2018] 93 taxmann.com 417/68 GST 457 (AAR – Karnataka) (para 2.6.1)
  • Shilpa Medicare Ltd., In re [2020] 117 taxmann.com 806/[2021] 84 GST 68 (AAR – Andhra Pradesh) (para 2.8.2)
  • Inox India Ltd. v. CCE 2001 taxmann.com 1542 (CEGAT – Mumbai) (para 2.9.3)
  • CCE v. Rajshree Sugars & Chemicals Ltd. [2014] 43 taxmann.com 257/44 GST 425 (Mad.) (para 2.9.3)
  • CCE v. Shrawasti Kisan Sahkari Chini [2014] 49 taxmann.com 502/47 GST 803 (All.) (para 2.9.3)
  • K.M. Sugar Mills Ltd. v. CCE 2001 taxmann.com 60 (CEGAT – New Delhi) (para 2.9.3)
  • Niphad SSK Ltd. v. CCE [2010] 3 taxmann.com 461 (Mum. – CESTAT) (para 2.9.3)
  • Jnan Ranjan Sen Gupta v. Arun Kumar Bose AIR 1975 SC 1994 (para 2.10.4)
  • Union of India v. Pradeep Kumari AIR 1995 SC 2259 (para 2.10.4)
  • JSW Steel Ltd. v. Union of India [2016] 66 taxmann.com 1/54 GST 21 (Bom.) (para 2.10.4)
  • Shilpa Medicare Ltd., In re [2022] 136 taxmann.com 221 (AAAR – Andhra Pradesh) (para 5.5.7).