23-Nov-2021 GST Implications in Case of Amalgamation

An Indian Company amalgamated with another Indian Company as per the Scheme of Amalgamation sanctioned by NCLT. The Company approached our team regarding advice in respect of GST registration, unutilised Input tax Credit etc . for the amalgamated entity as per Section 22 and Section 18 of Central Goods and Services Tax Act, 2017 (‘CGST Act’). Also, the Company wanted to know the procedure for claiming input tax credit lying in the electronic credit ledger of the transferor.

Our dedicated team of GST Experts studied the issue in detail and advised them regarding the GST registration related procedure to be followed as per Section 22 of CGST Act, 2017. In the instant case, based on the facts of the case and documentation, we opined that the Company will have to amend the GST Registration Certificate. Further, we opined that in order to transfer the electronic credit ledger balance available with the transferor, the transferor will have to follow Section 18(3) of CGST Act read with Rule 41 of Central Goods and Services Tax Rules, 2017. We provided the solution after examining various provisions of the GST law and ensured that the Company complied with all the provisions of the CGST Act. The registration related compliances will differ from company to company based on the facts of the case.