2025-VIL-211-AAR
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SGST Advance Ruling Authority

GST – West Bengal AAR - Transfer of business as a going concern - Applicant is an entity newly incorporated to take over the business assets along with the liabilities of M/s. Horizen, a proprietorship concern - Whether the transfer of business assets and liabilities amounts to "service by way of transfer of a going concern, as a whole or an independent part thereof" and is thus an exempt supply under GST – HELD - As per the facts, all the business assets (except personal assets) and liabilities of transferor-M/s. Horizen are being transferred to the applicant, and the applicant will carry on the business as a going concern. The financial statements of M/s. Horizen indicate that the company is a going concern. The Schedule II of the CGST Act provides that the transfer of a business as a going concern shall be treated as a supply of service, and Notification No. 12/2017-Central Tax (Rate) exempts such supply from GST. Therefore, the transfer of business from transferor company to the applicant as a going concern is an exempt supply - The transfer of assets and liabilities forming part of the business amounts to "service by way of transfer of a going concern, as a whole or an independent part thereof" and is thus an exempt supply as classified under Sl. No. 2 of Notification No. 12/2017 - Central Tax (Rate) dated 28.06.2017, as amended – Ordered accordingly - Taxability of services provided by the applicant - The applicant will carry out certain works and issue invoices in furtherance of or as an extension of the original work orders commenced under the name of the transferor, M/s. Horizen - Whether the supplies and/or invoices to be issued by the applicant in furtherance of or as an extension of the original work orders commenced under the name of M/s. Horizen shall be deemed to possess the identical taxability as if such transactions had remained with M/s. Horizen or new tax treatment would apply due to the business transfer - HELD - It is clear from the statutory provisions that the questions on which this authority has already pronounced ruling is binding only on the concerned applicant and the concerned jurisdictional officer and none else. On the other hand, the facts and circumstances supporting the earlier ruling have changed due to transfer of business of M/S Horizen. So the advance ruling dated 11.12.2024 in the case of M/s Horizen is not applicable for the present applicant - The work orders are of pure services, without any works contract service or other composite supply involving supply of goods, and are provided to the Government of West Bengal represented by the PHED. These services are in relation to the functions entrusted to panchayats under Article 243G and municipalities under Article 243W of the Constitution of India, and hence qualify for exemption under serial no. 3 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended.
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