Transfer of a running business as a going concern on slump sale basis does not amounts to ‘supply of service’ and hence exempt under GST.

Facts: In this case, the applicant intends to sell one unit out of its three units, along with all its fixed and current assets, liabilities, trade receivables for a lump sum consideration.

Issue: Whether business transfer agreement as a going concern on slump sale basis is exempt from levy of GST, in terms of Notification No. 12/2017.

Held: The Authority for Advance Ruling held that the business will continue in new hands, hence such transaction would be in the nature of a going concern. The transaction of transfer of business as a whole of one of the units of the Applicant in the nature of a going concern amounts to ‘Supply of services’ and not ‘Supply of goods’. Further, it would be covered under Sr. No.2 of the Notification No. 12/2017 subject to the condition that the unit is a going concern, and hence exempt from GST.