209.            The turnover of company X is Rs. 10 lac and of company Y is Rs. 20 lac. Total receipts of company Y is Rs. 6 lac. NCLT ordered merger of company X & Y on 17.5.2017. The effective date of order of scheme of merger was 5.5.2017. On 10.5.2017, company X sold goods to company Y at Rs. 5 lac. Who shall be liable to pay tax on transactions undertaken between the companies between effective date of order & date of order.

As per section 87 of the CGST Act, if any transaction of supply of goods/ services/ both is undertaken between the amalgamating or merging companies, then  such transaction of supply or receipt of goods/ services/ both shall be added in the turnover of X and receipt of Y.

Thus, turnover of supply / receipt as on date of transfer shall be:

X turnover of supply= 10 lacs + 5 lacs = 15 lacs

Y receipt= 6 lacs+ 5 lacs= 11 lacs