GST Provisions on Transfer /Change of Constitution Proprietor to partnership to Proprietor Input Tax Laibility

If a proprietorship business had added partner and in two partnership business one partner retired then these circumstances Existing registration is to be surrendered and new registration is to be obtained.

Input Tax Credit and Tax Liability on change of contitution

Section 18(3) of CGST Act states as under:-

(3) Where there is a change in the constitution of a registered person on account of sale, merger, demerger, amalgamation, lease or transfer of the business with the specific provisions 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.

Rules 41 of CGST Rules states as under:-

Transfer of credit on sale, merger, amalgamation, lease or transfer of a business.-
 (1) A registered person shall, in the event of sale, merger, de-merger, amalgamation, lease or transfer or change in the ownership of business for any reason, furnish the details of sale, merger, de-merger, amalgamation, lease or transfer of business, in FORM GST ITC-02, electronically on the common portal along with a request for transfer of unutilized input tax credit lying in his electronic credit ledger to the transferee: Provided that in the case of demerger, the input tax credit shall be apportioned in the ratio of the value of assets of the new units as specified in the demerger scheme.

(2) The transferor shall also submit a copy of a certificate issued by a practicing chartered accountant or cost accountant certifying that the sale, merger, de-merger, amalgamation, lease or transfer of business has been done with a specific provision for the transfer of liabilities.

 (3) The transferee shall, on the common portal, accept the details so furnished by the transferor and, upon such acceptance, the un-utilized credit specified in FORM GST ITC-02 shall be credited to his electronic credit ledger.

(4) The inputs and capital goods so transferred shall be duly accounted for by the transferee in his books of account.

PSDT Tax Due Date of Payment and other provisions

What is the due date of Payment under PSDT Tax (Punjab)

1. Section 6(3) of the Act read as under:- (Applicable to Non Salaried Persons)

    "The designated officer shall mention in every certificate of enrolment the amount of tax payable by the holder according to the Schedule and the date by which it shall be paid, and such certificate shall be deemed to be a notice of demand for the purposes of section 12"


2.  Section 10(2) and (3) are as under:-

   (2) The amount of tax due from the employers liable to deduct the tax from employees shall be paid every month within the prescribed time and in the prescribed manner.
   (3)The amount of tax due from enrolled persons for each year as specified in their enrolment certificate shall be paid within one month from the end of the month of enrolment.

3 Rules 12(1) and (2) are as under:-


      (1) Every employer, other than an officer of the Central Government or a State Government responsible for deduction of the due amount of tax from the salary or wages of the employees as defined in clause (e) of Section 2, shall deduct every quarter from the salaries or wages payable to the employees, an amount specified in the Schedule.(2) In the case of the employees of the Central Government or a State Government, the drawing and disbursing officer shall be responsible for thededuction of the amount of tax payable from the salaries or wages of the employees as defined in clause (e) of Section  

   2. The deduction shall be made every quarter from the salaries or wages payable to the employees and the amount of tax to be so deducted in each quarter, shall be equal to the amount specified in the Schedule.

RESULTS: Enrollment certificate do not contains date of payment (As provided under section 6(3). 
Section 10(2) say tax to be paid every month But Rule 12(1) (2) say tax from employees shall be deducted every quarter.
SO NO ANY LAST DATE for PAYMENT OF TAX under PSDT is prescribed

Input Tax Credit ITS Utilization wef 1/2/2019

Amendment for utilization of IGST-CGST-SGST with effect from 1/2/2019

Old Section 49(5)c

c) The State Tax shall first be utilised towards payment of State Tax and the amount remaining, if any, may be utilised towards payment of Integrated Tax

Additions wef 1/2/2019

“Provided that the input tax credit on account of State tax shall be utilised towards payment of integrated tax only where the balance of the input tax credit on account of central tax is not available for payment of integrated tax;”;

EFFFECT AMENDMENT IS TO MAKE PROVISIONS ACCORDING TO SYSTEM ALREADY DOING

Provisions Before Amendment  the assessee can do but system is not doing

                                                                        IGST                               CGST                     SGST

                                Credit Available                       0.00                        15000                    6000

IGST  (Due 16000)                                                                                 10000                    6000

CGST (Due 0 )

SGST (Due 0)

After amendment (System already doing this)

                                                                        IGST              CGST                    SGST

                                Credit Available             0.00                 15000                    6000

IGST  (Due 16000)                                                               15000                    1000

CGST (Due 0 )

SGST (Due 0)

Notwithstanding anything contained in section 49, the input tax credit on account of central tax, State tax or Union territory tax shall be utilised towards payment of integrated tax, central tax, State tax or Union territory tax, as the case may be, only after the input tax credit available on account of integrated tax has first been utilised fully towards such payment.

(Important wordiong is “Not withstanding containedin Section 49) meaning Section 49A will be supreme over section 49)

Next important word is FULLY utilized not FIRST utilized

EFFECT OF AMENDEMENT

BEFORE AMENDMENT

                                                            IGST      CGST         SGST       TOTAL

CREDIT AVAILABLE                       55000   20000          20000         95000

IGST (25000)                                      25000                                           25000

CGST (15000)                                                  15000                               15000

SGST (15000)                                                                      15000           15000

CLOSING BALANCE                       30000    5000            5000           40000

AFTER AMENDMENT

                                                            IGST        CGST       SGST            TOTAL

CREDIT AVAILABLE                       55000     20000         20000             95000

IGST (25000)                                       25000                                              25000

CGST (15000)                                      15000                                             15000

SGST (15000)                                     15000                                              15000

CLOSING BALANCE                            0      20000           20000           40000