GST ITC -02A Form is now active on GST portal: Declaration for transfer of ITC pursuant to registration under section 25 (2)

Registration under section 25 (2) covered where two separate registration can be obtained in single state due to different business vertical.

Now by filling GST ITC-02A form transfer of ITC from one vertical to other is possible. Let us discuss further in detail.

Rule 41A deals with Transfer of credit on obtaining separate registration for multiple places of business within a state or UT-

(1) A registered person who has obtained separate registration for multiple places of business in accordance with the provisions of Rule 11 and who intends to transfer, either wholly or partly, the untilized input tax credit lying in his electronic credit ledger to any or all of the newly registered places of business, shall furnish within 30 days from obtaining such separate registration, the details in Form GST ITC-02A electronically on the common portal either directly or through a facilitation center notified on  this behalf by the commissioner.

Provided that the input tax credit shall be transferred to the newly registered entities in the ratio of value of assets held by them at the time of registration.

Explanation– For the purposes of this sub rule,it is hereby clarified that the value of asset means the value of entire assets of the business whether or not input tax credit has been availed thereon.

(2) Newly registered person (Transferee) shall on the common portal, accept the details so furnish ed by the registered person ( Transferor) and upon such acceptance the untilized input tax credit specified in Form GST ITC-02A shall be credited in his electronic credit ledger.

Details to be furnished in GST ITC-02A are as follows:

Go to login: fill your credentials like Userid and password.

1) GSTIN of Transferee: Newly registered person to whom you want to transfer ITC. This will auto populate Transferee’s legal name and trade name.

2) Amount of matched ITC to be transferred: Amount available in electronics credit ledger of which amount to be transferred needs to mentioned according to head of tax Central tax, State/UT tax, Integrated Tax.

3) Save the above details and submit with DSC/ EVC.

Next Transferee needs to login to common portal and click on take action to accept credits transferred.

Example:

ABC Ltd has operations in Maharashtra with GSTIN:27AAxxxxxxxX1ZP (MH1)having credits in electronics ledger available is as follows CGST: Rs.10,000,SGST: Rs.10,000,IGST Rs.50,000. A new registration taken in the same state for different segment of business on 24 May 20 with GSTIN:27AAxxxxxxxX1ZQ (MH2) wanted to utilize credit available with MH1 to file GSTR-3B. MH1 should file GST-ITC-02A within 30 days of 24th May 2020 by 23 June 2020. MH2 should accept by clicking on Take Action. MH1 has a option to transfer all or partly based on value of asset by company on the date of registration. Hence asset with MH1 is Rs.10,00,000 and MH2 is Rs.10,00,000 on 24 May 2020 so ratio is 1:1. Available ITC will be divided equally between MH1 and MH2.

Key Note: Make sure PAN are same for both transferor and transferee.

Section 25 of Central Goods and Services Tax Act 2017 - Procedure for Registration

(1) Every person who is liable to be registered under section 22 or section 24 shall apply for registration in every such State or Union territory in which he is so liable within thirty days from the date on which he becomes liable to registration, in such manner and subject to such conditions as may be prescribed:

Provided that a casual taxable person or a non-resident taxable person shall apply for registration at least five days prior to the commencement of business.

Explanation.- Every person who makes a supply from the territorial waters of India shall obtain registration in the coastal State or Union territory where the nearest point of the appropriate baseline is located.

(2) A person seeking registration under this Act shall be granted a single registration in a State or Union territory:
Provided that a person having multiple business verticals in a State or Union territory may be granted a separate registration for each business vertical, subject to such conditions as may be prescribed.

(3) A person, though not liable to be registered under section 22 or section 24 may get himself registered voluntarily, and all provisions of this Act, as are applicable to a registered person, shall apply to such person

(4) A person who has obtained or is required to obtain more than one registration, whether in one State or Union territory or more than one State or Union territory shall, in respect of each such registration, be treated as distinct persons for the purposes of this Act.

(5) Where a person who has obtained or is required to obtain registration in a State or Union territory in respect of an establishment, has an establishment in another State or Union territory, then such establishments shall be treated as establishments of distinct persons for the purposes of this Act.

(6) Every person shall have a Permanent Account Number issued under the Incometax Act, 1961 in order to be eligible for grant of registration:
Provided that a person required to deduct tax under section 51 may have, in lieu of a Permanent Account Number, a Tax Deduction and Collection Account Number issued under the said Act in order to be eligible for grant of registration.

(7) Notwithstanding anything contained in sub-section (6), a non-resident taxable person may be granted registration under sub-section (1) on the basis of such other documents as may be prescribed.

(8) Where a person who is liable to be registered under this Act fails to obtain registration, the proper officer may, without prejudice to any action which may be taken under this Act or under any other law for the time being in force, proceed to register such person in such manner as may be prescribed.

(9) Notwithstanding anything contained in sub-section (1),-
any specialised agency of the United Nations Organisation or any Multilateral Financial Institution and Organisation notified under the United Nations (Privileges and Immunities) Act, 1947, Consulate or Embassy of foreign countries; and
any other person or class of persons, as may be notified by the Commissioner, shall be granted a Unique Identity Number in such manner and for such purposes, including refund of taxes on the notified supplies of goods or services or both received by them, as may be prescribed.

(10) The registration or the Unique Identity Number shall be granted or rejected after due verification in such manner and within such period as may be prescribed.

(11) A certificate of registration shall be issued in such form and with effect from such date as may be prescribed.

(12) A registration or a Unique Identity Number shall be deemed to have been granted after the expiry of the period prescribed under sub-section (10), if no deficiency has been communicated to the applicant within that period.

Only one registration to be granted in a State or UT [Section 25(2)]

A person seeking registration under this Act shall be granted a single registration in a State or Union territory.

However, a person having multiple business verticals in a State or Union territory may be granted a separate registration for each business vertical, subject to such conditions as may be prescribed.

All the provisions of Act, as are applicable to a registered person, are applicable to the person getting registered voluntarily [Section 25(3)]

A person, though not liable to be registered under section 22 or section 24 may get himself registered voluntarily, and all provisions of this Act, as are applicable to a registered person, shall apply to such person.

Every registration to be treated as distinct person in case of a person having more than one registration [Section 25(4)]

A person who has obtained or is required to obtain more than one registration, whether in one State or Union territory or more than one State or Union territory shall, in respect of each such registration, be treated as distinct persons for the purposes of GST Act, 2017.

Establishment of same person in different states to be treated as establishment of distinct person [Section 25(5)]

Where a person who has obtained or is required to obtain registration in a State or Union territory in respect

of an establishment, has an establishment in another State or Union territory, then such establishments shall be treated as establishments of distinct persons for the purposes of this Act.

PAN necessary for getting GST registration [Section 25(6)]

Every person shall have a Permanent Account Number issued under the Income-tax Act, 1961 in order to be

eligible for grant of registration:

However, a person required to deduct tax under section 51 may have, in lieu of a Permanent Account

Number, a Tax Deduction and Collection Account Number issued under the said Act in order to be eligible for grant of registration.