Answer

1. F

   Facts

   On transfer of business, the transferor applies for cancellation under Sec 29(1)(a) and can transfer unused ITC to the transferee through ITC-02 under Sec 18(3). The transferee needs its own registration.

2. P

   Provisions and law

   • Sec 18(3), CGST Act 2017Unused ITC can be transferred on sale, merger, amalgamation or transfer of business with specific provision for transfer of liabilities
   • Rule 41, CGST Rules 2017Transfer of ITC in ITC-02, accepted by the transferee
   • Sec 29(1), CGST Act 2017You or your legal heirs can ask for cancellation when the business closes, is transferred, changes constitution or is no longer liable to register
3. A

   Analysis

   Transfer of a business as a going concern needs the agreement to provide for transfer of liabilities. You file ITC-02 with a CA certificate on the transfer of liabilities, the transferee accepts it on the portal, and the credit moves. Then you file REG-16 giving the transferee's GSTIN. Do ITC-02 first, since after cancellation the credit cannot move.

4. C

   Conclusion

   1. 1Sign a business transfer agreement that transfers assets and liabilities.
   2. 2Ensure the transferee has its GSTIN.
   3. 3File ITC-02 with the CA certificate and get it accepted.
   4. 4File REG-16 citing transfer and the transferee's GSTIN.
   5. 5File GSTR-10.

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.