GST Exemption for Transfer of Business as Going Concern

In re Horizen Edge Technologies Private Limited (GST AAR West Bangal)

The Authority for Advance Ruling (AAR), West Bengal, addressed an application by a newly incorporated entity seeking to take over the business assets and liabilities of M/s. Horizen Edge Technologies Private Limited. The business activities involve digitalization and monitoring of mega water supply schemes, enhancement of the Jalmitra application, digitization of piped water supply schemes (PWSS), development of GIS tools, data management, analysis, documentation, and other technical consultancy services for the Public Health Engineering Department (PHED) of West Bengal. The applicant intends to continue the operations of M/s. Horizen as a going concern.

The applicant sought advance rulings on three key questions: (1) whether the transfer of assets and liabilities qualifies as a “service by way of transfer of a going concern” and is exempt under Notification No. 12/2017 – Central Tax (Rate) dated 28.06.2017, (2) the classification and GST rate if the first question is answered negatively, and (3) whether invoices and supplies issued in continuation of original work orders would retain the same taxability as when executed by M/s. Horizen.

The applicant highlighted that PHED oversees 6,851 PWSS, a network of 219 water testing laboratories, and monitors water quality through extensive digital and GIS-based tools. The department implements the Jal Jeevan Mission (JJM), aiming to provide Functional Household Tap Connections (FHTCs) to all rural households by 2024, integrating technologies like mobile/web applications, WebGIS, sensors, and digital asset management systems for real-time monitoring and reporting. The applicant’s services also include geo-referenced surveys, mapping, and data integration to support PWSS operations.