Change the GST No. in the name of proprietor to Brother name, what is to be done? the proprietor concern is running the stock and sundry debtors,creditors,fixed assets and loan taken over by his brother,is there any tax liability on stock.

Reply— GST registration is based on PAN of taxpayer, if a taxpayer wants to transfer the existing business to his brother who is not registered under GST, his brother needs to take fresh registration under GST as proprietory concern.

 As per sec.18(3) of CGST Act, 2017, read with Rule 41 of CGST Rules,2017, if there is change in constitution of a registered person, in case of sale, merger, demerger, amalgamation, lease or transfer of the business for any reason, then input tax credit lying in the credit ledger of the registered person can be transferred to another registered person by furnishing the details in FORM GST ITC-02 regarding change in constitution along with request to transfer the input tax credit in the credit ledger.

The acquired entity (Transferor) has to file declaration in FORM GST ITC-02 on GST portal, specifying the available matched ITC in each major head. The acquiring entity (Transferee) accepts / rejects the same in GST portal. 

Upon filing of the FORM GST ITC-02 by the acquired entity (Transferor), such details are notified to the acquiring (Transferee) entity through the GST portal. On acceptance, the un-utilized credit specified in FORM GST ITC-02 will be credited to his Electronic Credit Ledger. The Transferee (acquiring) Entity can change its decision to accept or reject an ITC Transfer request any number of times until it is finally submitted by the Transferor at the GST portal.

For filing the FORM GST ITC-02, the acquired (Transferor) entity must submit and upload a copy of certificate issued by a practicing chartered account or cost accountant, certifying that sale / merger / amalgamation / lease or Transfer of business has been done with specific provision for the Transfer of liabilities.  The FORM GST ITC-02 cannot be filed without such certificate.

then Transferor needs to apply for cancellation of GST registration as follows—

1) Login to the GST Portal with your user-ID and password. Navigate to the Services > Registration > Application for Cancellation of Registration option.

2) Application for Cancellation of Registration contains three tabs. Ensure that the Basic Details tab is selected by default. The first tab contains pre-filled information in sections of Basic Details and Address of Principal Place of Business. Either fill your Address for Future Correspondence manually, or check the option of Address same as above to copy the same address as in the Address of Principal Place of Business field.

3) The next tab Cancellation Details will get active, requiring you to make suitable selections and provide relevant information in corresponding fields. Select 'Transfer of business on account of amalgamation, merger, demerger, sale or otherwise' from the Reason for Cancellation drop-down list.

a) Enter the date from which registration is to be cancelled.

b) Provide the GSTIN of the Transferee entity under the Details for Transfer, Merger or Change in Constitution section. System will validate the same, and based upon it’s Legal Name of Business, will auto-populate the Trade Name.

GST on stock transfer

As per point 4(c) of  Schedule II of CGST Act, 2017, 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
(ii) the business is carried on by a personal representative who is deemed
to be a taxable person.

As per exception no. (i) mentioned above the GST is not applicable on transfer of stock.