Transfer of input tax credit in case of separate GST registrations

As per GST law, a taxpayer has the option to obtain separate GST registration for multiple places of business within a state or union territory under one income tax permanent account number. Such multiple registration within a state or union territory is generally required when the taxpayer wants to have different GSTIN for different business verticals for better management.

However, it’s not mandatory to get separate registration for each business vertical. If the registered person wants to operate all business verticals with one GSTIN then they can do so.

Such a registered person can transfer the unutilised Input Tax Credit or ITC lying in his electronic credit ledger to any or all of the newly registered place(s) of business in the ratio of the value of assets held by them at the time of registration.

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 unutilised input tax credit lying in his electronic credit ledger to any or all the newly registered place of business, shall furnish within a period of 30 days from obtaining such separate registrations, the details in Form GST ITC-02A electronically on the common portal, either directly or through a facilitation center.

Input tax credit shall be transferred to the newly registered entities in the ratio of the value of assets held by them at the time of registration. Value of assets means the value of the entire assets of the business whether or not input tax credit has been availed thereon.

The newly registered person shall on the common portal accept the details so furnished by the registered person and upon such acceptance, the unutilised input tax credit specified in Form GST ITC-02A shall be credited to his electronic credit ledger.

is a fellow member of the Institute of Chartered Accountants of India. He lives in Bhubaneswar, India. He writes about personal finance, income tax, goods and services tax (GST), company law and other topics on finance. Follow him on facebook or instagram or twitter.