Question38: What is the applicability of GST on slump sale of business'

Answer Please note that at present there is no specific provision in GST regarding Slum sale So we have to apply law as per logic

There are two possibilities 1st only some part of business is sold on slum sale basis for example out of three units registered under one registration of GST only one unit is sold

in this case you have to charge GST at the rate of 18% by classifying the project under chapter 98 and paying tax as per serial no 453 of schedule iii to the notification 1/17 because there is no specific rate given in Notification no 1 of GST and the classification is to be done as per Custom tariff under the category of project import This classification should be done as per explanation iii to the notification no 1/17 of central tax

Now coming to the second possibility which is more popular about the slum sale and is applied in most of the cases in this case total business along with all assets and liabilities is sold

in this case no GST will apply and as per section 18 read with Rule 41 all the ITC lying in books of the seller will transfer to the buyer account

Note as already discussed there is no specific provision relating to slum sale the above view is framed on the basis of our experience there may be different view of some other expert but in that case please revert back to us we will like discuss this issue(Reply dt. 11/4/2018)