ITC claimed in Legal Heir GSTN but the invoice was reflecting in Deceased proprietor GSTN, Goods and Services Tax - GST

[Bhavik Sankhla]

That there was death of the proprietor in the month of December 2021. That the New Registration was taken in the name of the proprietor's son being the legal heir and business was transfered to son. That Old registration in the name of father was cancelled wef December 2021.

But the issue was in the month of February 2021.The supplier uploaded the invoice in the old GSTN of deceased father. The ITC was claimed in Legal Heir Son's New GSTN, but the ITC was reflecting GSTR 2A of deceased father's old GSTN.

The Assessee asked supplier to correct the GSTN in the GSTR 1 in February 2021 itself but the supplier was government department did not made the necessary amendments in his GSTR 1.

Department has issued Notice and asking to reverse ITC.

Is the ITC claimed in the legal heir's New GSTN liable to be reversed ?

Thanks in Advance.

Posts / Replies

[Sadanand Bulbule]

Refer the following Section 18[3] :

(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.

So find out whether transfer of business to you falls under the above highlighted specific situation?

If not, then ITC is not available to the new GSTIN and needs to be reversed.