Whether GST will be charged in case of disposal of Business ?

As per the Schedule 1 of CGST Act,2017 GST will be charged in case of disposal of business whether for consideration or Not for Consideration.

Now there are certain situation in that case GST will not be charged.

1. When taxpayer is transferring the business as Going Concern. (i.e. Buyer is also going to continue the business)
2. When only one particular (i.e. Separate) unit of business is transferred or disposed off.
3. When the Business is transferred as slum Sale Basis

In all the above situations GST will not be charged if not for consideration.

Reason for the not charging GST in above situation : Basically in all the above situations buyer is also going to continue the business hence there will be no any revenue loss to the government, hence there will be no applicability of GST.

Now, Question is that when the taxpayer has disposed off the business without consideration then on which amount GST will be charged by the Revenue Authority : In this situation, Value of Supply will calculated as per various rules for valuation purposes under GST. (Like – Rule 27,28,29,30,31 of CGST Rules)

So in this blog we have covered the Specific Situation of applicability of GST in case of Disposal of Business. To know more about this article you may connect with me over LinkedIn.

Author By :

CA SACHIN JAIN