ITC can be transferred during amalgamation of companies even if companies are located in different States – Bombay High Court {Umicore Autocat India Pvt. Ltd. V/s Union of India – (2025) 32 Centax 416 (Bom.)}
Facts:
- A Goa-based company (transferor) amalgamated with a Maharashtra-based company (transferee – the petitioner).
- Petitioner applied to transfer the unutilized ITC of the transferor company.
- GST portal refused, showing the error “Transferee and transferor should be of the same State/UT.”
- Petitioner argued that Section 18(3) of the CGST Act and Rule 41 of the CGST Rules do not impose such a same-State requirement.
Issue:
- Whether ITC can be transferred between companies in different States upon amalgamation, despite GST portal restrictions.
Held:
-
- Law does not restrict ITC transfer across States when there’s a change in constitution due to amalgamation, merger, demerger, etc. with transfer of liabilities.
- Petitioner is entitled to unutilized ITC of the transferor company.
- However, SGST of Goa cannot be used in Maharashtra (to avoid loss to Goa’s revenue).
- Only IGST and CGST credits in the transferor’s ledger were allowed to be transferred.
