A. FOR TRANSFERRING OF FIRM/STOCK:

There can be two situations commonly in case of death of proprietor either the business is transferred as going concern to legal heir or business may be discontinued. We can understand both the situations as per follows:

SENERIO I: Business is transferred as going concern to legal heir:

1. Obtaining the new registration:

As per provisions of sub-section (3) of section 22 of the CGST Act,

“Where a business carried on by a taxable person registered under this Act is transferred, whether on account of succession or otherwise, to another person as a going concern, the transferee or the successor, as the case may be, shall be liable to be registered with effect from the date of such transfer or succession.”

The transferee or the successor, as the case may be have to apply for the FORM GST REG-01 but in filling of the form below points have to keep in mind:

a. The applicant is required to mention the reason to obtain registration as “death of the proprietor”

b. Death certificate of the deceased to be attach in form.

2. Transfer of ITC:

a. A registered person shall submit 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:

b. The transferor shall also submit a copy of a certificate issued by a practising chartered accountant or cost accountant.

c. 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.

d. The inputs and capital goods so transferred shall be duly accounted for by the transferee in his books of account.

3. Cancellation of Registration:

Clause (a) of sub-section (1) of section 29 of the CGST Act, allows the legal heirs in case of death of sole proprietor of a business, to file an application for cancellation of registration in FORM GST REG-16 electronically on the common portal on account of transfer of business for any reason including death of the proprietor. In FORM GST REG-16, the reason for cancellation is required to be mentioned as “death of sole proprietor”.

4. Liability of Transferor:

The transferee/successor shall be liable to pay any tax, interest or any penalty due from the transferor in cases of transfer of business due to the death of the sole proprietor.

SENERIO II: Business is closed by legal heir:

1 Legal heir have to apply for Cancellation of registration and pay tax for stock in hand which is as raw material, semi-finished goods, finished goods and capital goods or the output tax payable on such goods by way of debiting either the electronic credit or cash ledger.

2 Filling of Form GSTR-10

3 The Legal Heir/successor shall be liable to pay any tax, interest or any penalty due from the deceased.

B. FOR TRANSFER OF BANK ACCOUNT:

It is not possible for legal heir to transfer the account number of deceased to in his name. So legal heir have to submit death certificate and application to branch of bank to transfer the balance in his name.