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CGST Rule 41: Transfer of credit on sale, merger, amalgamation, lease or transfer of a business | Finin2min

CGST Rule 41 — Transfer of credit on sale, merger, amalgamation, lease or transfer of a business

CGST Rules, 2017
CURRENT
Source note: The text and status on this page are tied to the official source gateway. Open official source.

Official sources

Finin2min Summary - Rule in 2 Minutes

ITC-02 transfers unutilised credit on sale, merger, demerger, amalgamation, lease or transfer with specific provision for liabilities and CA/CMA certificate; demerger allocation follows asset-value ratio. Rule 160 RULE TEXT / CONSOLIDATED BASE LAYER 160. Recovery from company in liquidation.- Where the company is under liquidation as specified in section 88, the Commissioner shall notify the liquidator for the recovery of any amount representing tax, interest, penalty or any other amount due under the Act in FORM GST DRC -24. CURRENT OPERATIVE CONTROL AT 29 JUNE 2026 Commissioner notifies liquidator for recovery in DRC-24 and communicates amount under section 88.

official statutory reference

41. Transfer of credit on sale, merger, amalgamation, lease or transfer of a business.- (1) A registered person shall, in the event of sale, merger, de-merger, amalgamation, lease or transfer or change in the 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 for transfer of unutilized input tax credit lying in his electronic credit ledger to the transferee: Provided that 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. Explanation:- For the purpose of this sub-rule, it is hereby clarified that the “value of assets” means the value of the entire assets of the business, whether or not input tax credit has been availed thereon.72 72 Inserted vide Notf no. 16/2019-CT dt. 29.03.2019 (2) 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 the transfer of liabilities. (3) 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. (4) The inputs and capital goods so transferred shall be duly accounted for by the transferee in his books of account. Rule 41A. Transfer of credit on obtaining separate registration for multiple places of business within a State or Union territory.- (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 unutilised input tax credit lying in his electronic credit ledger to any or all of the newly registered place of business, shall furnish within a period of thirty days from obtaining such separate registrations, the details in FORM GST ITC-02A electronically on the common portal, either directly or through a Facilitation Centre notified in this behalf by the Commissioner: Provided that the 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. Explanation.- For the purposes of this sub-rule, it is hereby clarified that the ‗value of assets‘ means the value of the entire assets of the business whether or not input tax credit has been availed thereon. (2) The newly registered person (transferee) shall, on the common portal, accept the details so furnished by the registered person (transferor) and, upon such acceptance, the unutilised input tax credit specified in FORM GST ITC-02A shall be credited to his electronic credit ledger.73

Paragraph-wise decode

ITC-02 transfers unutilised credit on sale, merger, demerger, amalgamation, lease or transfer with specific provision for liabilities and CA/CMA certificate; demerger allocation follows asset-value ratio.

Rule 160 RULE TEXT / CONSOLIDATED BASE LAYER 160. Recovery from company in liquidation.- Where the company is under liquidation as specified in section 88, the Commissioner shall notify the liquidator for the recovery of any amount representing tax, interest, penalty or any other amount due under the Act in FORM GST DRC -24. CURRENT OPERATIVE CONTROL AT 29 JUNE 2026 Commissioner notifies liquidator for recovery in DRC-24 and communicates amount under section 88.

Section-Rule-Form-Notification bridge

No directly corresponding Rule is mapped to this provision. Check notifications, circulars, forms and corresponding State law.

Practical Q&A

What does rule 41 regulate?
It regulates transfer of credit on sale, merger, amalgamation, lease or transfer of a business. Read the exact text, conditions, exceptions and transaction date together.
Which subordinate law should be checked?
No CGST Rule corresponds directly to this provision. Notifications, circulars, forms and the corresponding SGST/UTGST layer may also apply.
What evidence should be retained?
Preserve the contract or transaction record, invoice or form, portal acknowledgement, payment/ledger evidence, correspondence, legal working and the official source version used.
Can portal behaviour override the statute?
No. Portal functionality is operational evidence; legal entitlement and liability remain controlled by the Act, Rules, notifications and binding decisions.

Professional rule note

Legal state: Current controlled · Checked: 27 July 2026. Read the official statutory reference and amendment history together.

Why Rule 41 matters

Transfer of credit on sale, merger, amalgamation, lease or transfer of a business should be read with its enabling CGST Act provision, prescribed forms, amendment notification, transaction date and the live portal workflow. The operative-text block on this page remains the legal core; the application controls add practical steps without altering it.

Rule → Form → evidence bridge

FORM GST DRCFORM GST ITC-02FORM GST ITC-02SFORM GST ITC-02AEFORM GST ITC-02AS

Practical cases

ITC claim

Reconcile invoice/legal eligibility with GSTR-2B/IMS and books; portal visibility alone is not legal entitlement.

Reversal/re-availment

Document trigger date, calculation, ledger treatment and conditions for re-availment.

Shared/common credit

Use a reproducible allocation working with evidence retained for audit and notice response.

Finin2min Q&A

What does CGST Rule 41 deal with?
Transfer of credit on sale, merger, amalgamation, lease or transfer of a business. Start with the operative Rule version and then test the connected Act provision, forms and amendments.
Which GST form is connected to Rule 41?
DRC, ITC-02, ITC-02S, ITC-02AE, ITC-02AS The Rule and live portal workflow control.
Can I rely only on the GST portal?
No. Portal functionality is execution infrastructure; legal eligibility and consequences come from the Act, Rules and valid instruments.
What should I keep on file?
The official Rule version used, amendment/effective-date evidence, underlying transaction records, computation, portal submission and resulting acknowledgement/order.
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Related guidance: CGST Rules Repository — complete legal-state and form map · CGST Rule 149: Prohibition against sale on holidays

Current-law and operative-rule checkpoint

Primary-source starting points already associated with this page

Finin2min.com · Educational and professional reference · Verify the current Gazette, applicable State law, portal version and binding judicial developments before reliance.