Procedure for transfer of credit on sale, merger, amalgamation, lease or transfer of a business :
A registered person shall, on sale, merger, de-merger, amalgamation, lease or transfer or change in ownership of business for any reason, furnish the details of sale, merger, de-merger, amalgamation, lease or transfer of business, in form GST ITC-02 electronically on the Common Portal along with a request to transfer the unutilized input tax credit lying in his electronic credit ledger to the transferee – rule 6(1) of Input Tax Credit Rules.
In the case of demerger, the input tax credit shall be apportioned in the ratio of the value of assets of the new units as specified in the demerger scheme.
The transferor shall also submit a copy of a certificate issued by a practicing chartered accountant or cost accountant certifying that the sale, merger, de-merger, amalgamation, lease or transfer of business has been done with a specific provision for transfer of liabilities – rule 6(2) of Input Tax Credit Rules.
The transferee shall, on the Common Portal, accept the details so furnished by the transferor and, upon such acceptance, the un-utilized credit specified in form GST ITC-02 shall be credited to his electronic credit ledger – rule 6(3) of Input Tax Credit Rules.
The inputs and capital goods so transferred shall be duly accounted for by the transferee in his books of account – rule 6(4) of Input Tax Credit Rules.