The details of AAR is as under:

APPELLATE AUTHORITY FOR ADVANCE RULING, ANDHRA PRADESH

Shilpa Medicare Ltd., In re

The key observation & Ruling by the AAR is as under:

1.    Transfer of business as a going concern between distinct persons does not attract provisions of para 4(c) of Schedule II of CGST Act, 2017 as distinct persons do not qualify to be another person; Transfer is in nature of supply of goods

2.    GST laws do not provide for transfer of ITC accumulated in one State to another State and therefore, unutilized ITC cannot be transferred to another State

3.    In this case, the applicant intends to transfer whole business as a going concern to distinct person where both are holders of same PAN.

4.     Advance ruling holding that such transfer of whole business would amount to supply of services and exempted under Notification No. 12/2017-Central Tax (Rate).

5.    AAR hold that the present transaction does not qualify to be transfer of going concern to another person as same is between distinct persons. Provisions of para 4(c) of Schedule II of CGST Act does not apply in the present case as both parties to transaction are distinct persons holding same PAN.

6.    Impugned transaction not being a supply of service, would be treated as supply of goods – Exemption being related to service of transfer of going concern, is not applicable – Impugned ruling set aside – Schedule II of Central Goods and Services Tax Act, 2017/Andhra Pradesh Goods and Services Tax Act, 2017

7.    On the issue as to whether GST ITC-02 can be filed and unutilized ITC be transferred from one unit to another unit in a different State, AAR held as under:

Question of transfer of ITC does not arise as there is no supply of services of transfer as going concern.
Transfer of ITC would not be permissible in present case as there is no evidence of change in constitution of registered person as required under section 18(3). Both parties are one and same entity.

GST laws do not provide for transfer of ITC accumulated in one State to another State.

Scope of State GST Acts cannot extend beyond the territory of respective States.

Credit accumulated under a particular State GST Act cannot be utilized in another State.

Transfer of ITC earned is not allowed due to exclusivity of ITC earned in a particular State.  Facility of transfer of credit using Form ITC-02 is not available in present case. Impugned advance ruling is set aside. Section 18(3) of Central Goods and Services Tax Act, 2017/Section 18(3) of Andhra Pradesh Goods and Services Tax Act, 2017