GST Provision In Case of Death of the Proprietor


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Article explains Provision of GST after death of Proprietor, Who is liable for Applying GST Registration Cancellation, How to Add Legal Heir,  Status of Balance Lying in the Electronic Credit Ledger and Process of Transfer of ITC.

Provision after Death of Proprietor:-

1. Add Legal Heir

2. Apply for Cancellation

3. File Final Return GSTR 10

Liable for GST Registration Cancellation:-

In case of Sole Proprietorship, the registration under GST is based on Pan Number of Proprietor. So after death of Proprietor it was not possible to run same business without cancellation of GST Number.

Now the Question arises “Who is Liable for Cancellation of GST Registration Number”.

The Liability is with Legal Heir or Successor.

How to Add Legal Heir or Successor:-

1. There was No Process for Adding Legal Heir Online. It was Totally Offline Process.

2. The successor or legal heir has to first submit the death certificate of the sole proprietor and the succession certificate to the jurisdictional proper officer as documentary evidence.

4. The Legal Heir is required to take new registration.

Status of Balance Lying in Electronic Cash Ledger:-

In Case of Death, If legal Heir or Successor want to continue the business, than successor need to take the registration under GST and the balance lying in the Credit Ledger will transfer to the new registered GST Number.

It should be Noted that at the time of taking Registration, the Reason for taking Registration must be “Death of Proprietor”.

Process of Transfer of ITC to the Successor:-

The proper officer will then add the successor as the authorized signatory for the deceased sole proprietor.

A temporary username and password will be sent to the e-mail address of the newly added authorized signatory. Using these temporary credentials and the first-time login link, the successor can now login to the account of the sole proprietor. He will be asked to change the username and password immediately. Upon successful login, he will have to file Form GST ITC-02 using the same registration, i.e. registration of the deceased sole proprietor. The form has to be filed after filling in the relevant details.

To complete the transfer of ITC, the successor has to accept such transfer using his registration. After the transfer is complete, he can now proceed with the cancellation of registration of the deceased sole proprietor.


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