9911796707
TMI Blog2018 (5) TMI 1651X X X X Extracts X X X X X X X X Extracts X X X X ..... ncern constitutes a supply of service - A going concern is a concept of accounting and applies to the business of the company as a whole. Transfer of a going concern means transfer of a running business which is capable of being carried on by the purchaser as an independent business. In the instant case, the Applicant has not furnished any documentary evidence to establish that the Applicant is a going concern except their admission that its an ongoing business and the transaction proposes to transfer all the assets and liabilities to the new owner. It implies that the business will continue in the new hands with regularity and a nature of permanency. Ruling: - The transaction of transfer of business as a whole of one of the units of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k term loans, bank working capital loans, creditors for supplies etc., for a lump sum consideration. 3. The applicant has sought Advance Ruling on the following questions / issues: 1. Whether the transaction would amount to supply of goods or supply of services or supply of goods services? 2. Whether the transaction would cover under sl.no.2 of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017? Both the aforementioned questions are covered under Section 97(2)(g) and 97(2}(b) of the CGST Act, 2017, respectively. The Application is , therefore, admitted. PERSONAL HEARING PROCEEDINGS HELD ON 09.01.2018. 4. Sri S. Vishnu Murthy, Chartered Accountant and the authorised representative of the Applican ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces? and (2) Whether the transaction would cover under si.no.2 of the Notification No. 12/2017-Central Tax (Rate) dated 28.06,2017? 7. The first question before the Authority to decide is whether the aforesaid transaction would amount to supply of goods or supply of services or supply of goods and services. 7.1 The Applicant has stated at Serial number 15 of their application that they intend to sell one of their animal feed manufacturing units operational since 1990. Further it has been contended that this unit besides having fixed assets in the form of land, building, plant and machinery has current assets like receivables, inventory etc. Further the said unit is stated to have term loans availed from the banks for setting up of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch that undertaking that activity shall amount to conduct of business or enhancing the business. The transfer of a going concern, either as a whole or an independent part thereof, for a lump sum consideration does not constitute an activity taking place in the course of business or for furtherance of business, However since the word 'includes' has been used in Section 7(1) the scope of supply goes beyond the meaning of the expression 'in the course or furtherance of business', Therefore in the case of the transfer of a going concern even if the act of transfer does not constitute an activity carried out in the course of regular business or for furtherance of business, the activity may still qualify to be termed as a supply. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;Services by way of transfer of a going concern, as a whole or an independent part thereof. This indicates that the activity of transfer of a going concern constitutes a supply or service. The Notification further provides 'Nil' rate of tax on such a supply. On the basis of the aforementioned analysis we conclude that the transfer of a going concern constitutes a supply of service. 8. The second question for which a Ruling has been sought is whether the transaction would cover under si.no.2 of the Notification No. 12/2017-Central Tax (Rate] dated 28.06.2017? 8.1 The notification itself speaks that the activity of transfer of a going concern, as a whole or independent part thereof, is exempt from payment of so much Central T ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
