Govt to unfold scrapping policy for automobiles sooner: FMFM announces change in auto policy - BS-IV vehicles registered prior to March 31, 2020 to be allowed full shelf life + Addl 15% Depreciation to be allowed till March 2020 + Ban on purchase of new cars replacing old vehicles by Govt Departments liftedGovt working on solutions for home buyers and real estate promoters stuck with fund problemsFM says tax officials to be instructed not to overreach taxpayers to meet targetsNBFCs to be allowed to use Aadhar-authenticated KYC of banks: FMGovt to amend MSME Act to give ONE definition for MSME; Cabinet approval to be taken soonBank loans - Online tracking option to be given to customers for ease of knowing status + Banks to introduce one time loan settlement policyGovt decides to withdraw Surcharge on capital gains made by FPIs + Surcharge on domestic investors also guillotinedFM says All notices, including summons, by Income Tax Department to be centralised & computer-generated from October 2019 + Old notices to be either clears before Oct or to be re-generated with DIN + all notices to be cleared within 3 monthsGST - Amritsar CGST holds Annual Return Mela with practitionersSC grants relief to Chidambaram in ED case till Monday but no succour in CBI casePradhan to launch commencement of work ceremony for 10th CGD Bidding Round (See 'TOG News')TP - Company engaged in manufacturing, assembling, servicing & software cannot be held as good comparable to trading segment: ITAT (See 'TOG Latest')I-T - Where 71% of the receipts of a trust are used in furtherance of its stated objectives the same is sufficient to infer that such trust exists: HC (See 'TOG Latest')Customs - Where assessee requests for speaking order & pays duty under protest, it cannot be inferred that assessee accepted enhanced value: CESTAT (See 'TOG Latest')Central Excise - Where assessee harbored bona fide belief in respect of an issue due to conflicting precedent judgments, then extended limitation cannot be invoked: HC (See 'TOG Latest')Sabka Vishwas Legacy Dispute Resolution Scheme to be effective from Sept 01 (See 'TOG News')TP - Similarity of functions/characteristic of services rendered by comparables are indispensable for their selection for purposes of benchmarking: ITAT (See 'TOG Latest')I-T - Holding more than 20% shares in two companies is in itself insufficient to infer that loan given by one company to the other is commercial transaction: HC (See 'TOG Latest')Central Excise - Clean Energy Cess bears nature of fee & is not any duty; hence assessee is not entitled to Cenvat credit on the same: CESTAT (See 'TOG Latest')Service Tax - If assessee claims refund in bona fide before wrong authority, then reasonable course of action is to transfer such claim to that authority having jurisdiction: CESTAT (See 'TOG Latest')EPF Board to move proposal for amend scheme (See 'TOG News')Naidu urges nations to adopt Comprehensive Convention on International Terrorism (See 'TOG News')
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Existing Units Can Transfer Whole Unutilized ITC To New Unit
By Anshul Jain, Adv, SRA Consulere Advocates
May 15, 2019

THE Central Goods and Services Tax Act, 2017 (here in after referred to as ‘the Act' ) has been amended vide the Central Goods and Services Tax (Amendment) Act, 2018. The provisions, except few, of the Amendment Act were made effective from 01.02.2019 vide Notification No.02/2019-C.T. dated 29.01.2019. Section 25 of the Act has been amended to allow the taxpayers to take separate registration for multiple places of business in the same State or Union Territory.


The term ‘Place of Business' has been defined under Section 2(85) of the Act. The same is reproduced below for ready reference:

'Section 2(85) 'place of business' includes - 

(a) a place from where the business is ordinarily carried on, and includes a warehouse, a godown or any other place where a taxable person stores his goods, supplies or receives goods or services or both; or

(b) a place where a taxable person maintains his books of account; or  

(c) a place where a taxable person is engaged in business through an agent, by whatever name called;'

The above Definition is very clear and without any ambiguity. Thus, any place which falls within the above Definition can be registered under the Act.


The taxpayer, having multiple place of business in the State or Union Territory and who wishes to take separate registration for all or any of the such place of business, has to satisfy the condition mentioned under Rule 11 of the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as ‘the Rules' ). The conditions are as under:

a)  such taxpayer has more than one place of business;

b)  such taxpayer shall not pay tax under Composition Scheme (Section 10) for any of his places of business if he is paying tax under Section 9 for any other place of business;

c)  all separately registered places of business of such taxpayer shall pay tax under the Act on supply of goods or services or both made to another registered place of business of such taxpayer and issue a tax invoice or a bill of supply, as the case may be, for such supply.


The newly inserted Rule i.e. Rule 41A of the Rules provides that a taxpayer who has obtained separate registration for multiple places of business can transfer its unutilized Input Tax Credit (hereinafter referred to as ‘ITC' ) to any or all newly registered units. The said Rule 41A(1) is reproduced below for ready reference:

'Rule 41A. Transfer of credit on obtaining separate registration for multiple places of business within a State or Union territory. - (1) A registered person who has obtained separate registration for multiple places of business in accordance with the provisions of rule 11 and who intends to transfer, either wholly or partly, the unutilised input tax credit lying in his electronic credit ledger to any or all of the newly registered place of business , shall furnish within a period of thirty days from obtaining such separate registrations, the details in FORM GST ITC-02A electronically on the common portal, either directly or through a Facilitation Centre notified in this behalf by the Commissioner :

Provided that the input tax credit shall be transferred to the newly registered entities in the ratio of the value of assets held by them at the time of registration.

Explanation.- For the purposes of this sub-rule, it is hereby clarified that the ‘value of assets' means the value of the entire assets of the business whether or not input tax credit has been availed thereon. ' 

[Emphasis & underlining supplied]

It is evident from a careful perusal of the above Rule that a taxpayer who has obtained separate registration for multiple places of business can transfer his unutilized ITC to any or all such newly registered places. The Rule also provides that such ITC can be transferred either wholly or partly i.e. a taxpayer can transfer either the entire unutilized ITC to the newly registered unit(s) or can transfer a part of such unutilized ITC. Further, if the taxpayer has registered two or more new places of business, such taxpayer can either opt to transfer the unutilized ITC to any or all such newly registered units. In case, the taxpayer decides to transfer the unutilized ITC to more than one newly registered unit then the unutilized ITC shall be transferred in the ratio of value of assets held by each such unit at the time of registration.

It is to be noted here that the newly inserted Rule does not provide to consider the value of assets of the existing registered unit. Which means that while transferring the unutilized ITC accumulated at the existing registered unit, the taxpayer may retain the share of unutilized ITC for the existing registered unit or may transfer the entire accumulated ITC to the newly registered units. Thus, it can be concluded that where the taxpayer decides to transfer the unutilized ITC of the existing unit to only one newly registered unit, the taxpayer has an option of transferring the entire unutilized ITC to such newly registered unit irrespective of the value of its assets.

The taxpayer has to file details pertaining to transfer of ITC in Form GST ITC-2A within 30 days of obtaining separate registration and once, the said details are accepted by the newly registered unit, the ITC transferred from existing registered unit will be reflected in the electronic credit ledger of the new unit.

(The views expressed are strictly personal.)