Transfer of Input Tax Credit upon Sole Proprietor's Death
<p><span>The Government of India has clarified the procedure for the transfer of input tax credit (ITC) in case of the death of a sole proprietor. The key highlights from Circular No. 96/15/2019-GST are as follows:</span></p><ol start="1"><li><span><strong>Transfer of ITC to Transferee</strong>:</span><ul><li><span>The ITC remaining unutilized in the electronic credit ledger of the deceased sole proprietor can be transferred to the transferee/successor by filing FORM GST ITC-02 electronically.</span></li></ul></li><li><span><strong>Registration Liability of Transferee</strong>:</span><ul><li><span>The transferee or successor is liable to be registered from the date of transfer or succession, and must mention "death of the proprietor" while applying for registration.</span></li></ul></li><li><span><strong>Cancellation of Registration on Account of Death</strong>:</span><ul><li><span>Legal heirs can apply for cancellation of the deceased proprietor's registration by filing FORM GST REG-16 electronically, mentioning "death of sole proprietor" as the reason for cancellation.</span></li></ul></li><li><span><strong>Liability for Tax, Interest, and Penalty</strong>:</span><ul><li><span>The transferee or successor is liable to pay any tax, interest, or penalty due from the transferor. Both the transferor and transferee will be jointly and severally liable for any dues.</span></li></ul></li><li><span><strong>Transfer Process</strong>:</span><ul><li><span>The transferee/successor must file FORM GST ITC-02 before applying for cancellation of the registration. Upon acceptance, the unutilized ITC will be credited to their electronic credit ledger.</span> <a href="https://cms.plasament.com/storage/circular-cgst-96.pdf">circular-cgst-96</a><br> </li></ul></li></ol>