In re Swingbuy Hospitality LLP (GST AAR Karnataka)
Summary : The Karnataka Authority for Advance Ruling held that Swingbuy Hospitality LLP’s transfer of its restaurant business to Barbeque-Nation Hospitality Private Limited qualified as transfer of a going concern and was exempt from GST under Entry No. 2 of Notification No. 12/2017-Central Tax (Rate), dated 28 June 2017. The Authority explained that transfer of every past liability is not an indispensable condition for this exemption. The transaction must be examined as a whole, particularly whether the essential elements of a functioning business have been transferred so that the buyer can continue it independently.
The applicant operated in the hospitality sector, including hotels, restaurants and cafés. Originally incorporated as a private limited company, it was converted into an LLP with effect from 8 February 2024. Under Commercial Terms for Agreement to Sale dated 2 May 2024, it agreed to transfer its restaurant business for a lump-sum consideration of ₹75 lakh. The arrangement covered restaurant operations, associated staff, faculty accommodation, recurring operational costs and the assets specified in Annexure-A. The applicant stated that liabilities arising from past operations, including statutory dues and claims, would not pass to the buyer, except outstanding running costs relating to the restaurant.
The applicant sought a ruling on whether the transaction constituted transfer of a going concern as a whole or an independent part thereof and, if not, the applicable tax rate and item-wise valuation. The application was admitted under Sections 97(2)(a) and 97(2)(e) of the CGST Act, 2017, concerning classification and determination of tax liability. At the personal hearing on 30 July 2026, the authorised representatives submitted that the business assets had been transferred under the agreement and claimed the going concern exemption.
According to the applicant, the commercial substance of the transaction prevailed over the agreement’s description as a Letter of Intent or its reference to acquisition of assets. Taking over restaurant operations, staff arrangements and recurring costs indicated acquisition of a running business rather than isolated equipment or furniture. Annexure-A identified the transferred assets without assigning separate prices, while the agreed ₹75 lakh represented consideration for the undertaking. The applicant also argued that the contractual expression “inclusive of GST / other taxes” merely addressed uncertainty and could not determine statutory taxability. It distinguished a functioning business transfer from the accounting concept of going concern and alternatively submitted that the arrangement constituted a composite supply under Section 2(30), with business transfer as the principal supply.
The Authority first held that the transaction constituted a supply under Section 7(1)(a) of the CGST Act. The applicant was a person within Section 2(84)(e), the ₹75 lakh payment was consideration, and the transaction arose in the course or furtherance of its hospitality business. It then examined whether the supply qualified for exemption. Since “going concern” is not specifically defined in the CGST Act, the decisive test was whether an existing business undertaking was transferred as a functioning economic activity capable of continuation by the transferee.
The agreement’s operational handover clauses were supported by the Handover Letter and Asset Transfer Acknowledgement Letter dated 7 May 2024. These recorded actual transfer of restaurant operations, associated staff, accommodation and recurring operational costs. Physical assets, equipment, fixtures, furniture, kitchen appliances and stock items were verified and handed over in working condition. The buyer also assumed responsibility for subsequent maintenance, repairs, operational expenses and insurance. These documents established transfer of the business activity and the arrangements necessary for its continuation, rather than merely ownership of individual assets.
The Authority clarified that absence of item-wise valuation was not, by itself, conclusive evidence of a going concern transfer. However, the single lump-sum consideration, read with the handover of operations and essential assets, supported transfer of an operational undertaking. Similarly, retention or exclusion of certain past liabilities could not, in isolation, change the character of an otherwise identifiable transfer of a functioning business. Considering the circumstances cumulatively, the Authority found the necessary functional continuity and held the supply exempt under Entry No. 2 of Notification No. 12/2017-Central Tax (Rate). Consequently, the alternative question concerning the applicable rate and valuation of individual items did not survive for consideration.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING KARNATAKA
ORDER UNDER SECTION 98(4) OF THE CGST ACT, 2017
& UNDER SECTION 98(4) OF THE KGST ACT, 2017
M/s. Swingbuy Hospitality LLP (herein after referred to as the “Applicant”), # No.172/1, Srinivasa Industrial Estate, Bilekahalli, Bannerghatta Road, Bannerghatta Road Sub Post Office, Bilekahalli, Bengaluru, Bengaluru Urban, Karnataka, 560076, is registered Under GSTIN 29AFFFS4697K1Z3, have filed an application for Advance Ruling under Section 97 of CGST/KGST Act, 2017 read with Rule 104 of CGST/KGST Rules, 2017, in form GST ARA-01 discharging the fee of Rs.5,000/- each under the CGST/KGST Act, 2017.
2.1 The Applicant is engaged in the business of providing hospitality services, including operating hotels, restaurants and cafés, and undertaking activities as a collaborator, franchiser, technical consultant and marketer for hotels, motels and other hospitality establishments. The Applicant was originally incorporated as a private limited company under the provisions of the Companies Act, 1956. Subsequently, with effect from 08.02.2024, the company was converted into a Limited Liability Partnership (LLP) under the name and style of M/s. Swingbuy Hospitality LLP.
2.2 The Applicant has submitted that it entered into Commercial Terms for Agreement to Sale dated 02.05.2024 with Barbeque-Nation Hospitality Private Limited for the transfer of its restaurant business. The transferee is also engaged in the business of operating restaurants.
3. In view of the above, the applicant has sought advance ruling in respect of the following questions:
a) Whether such transfer of business is to be construed as transfer of a going concern as whole or independent part thereof?
b) If it is dissentient, what is the rate applicable to such transfer and how to determine the value of each item of such transfer?
4. Admissibility of the Application: The Applicant, under Column 13 of Form ARA-01, has indicated the category of issue as follows:
i. Classification of any goods or services or both
ii. Determination of the liability to pay tax on any goods or services or both.
The questions raised by the Applicant fall within the ambit of Section 97(2)(a), Section 97(2)(e) of the Central Goods and Services Tax Act, 2017, pertain to the classification of services and the determination of the liability to pay tax thereon. Therefore, the application is held to be admissible under Section 97 of the CGST Act, 2017.
5.1 Brief Facts of the Case: – The Applicant submits that, in terms of the Commercial Terms for Agreement to Sale dated 02.05.2024, Barbeque-Nation Hospitality Private Limited has agreed to acquire the Applicant’s restaurant business. Pursuant to the said agreement, all rights, title and interest in the business, together with the specified assets, are proposed to be transferred by the Applicant to Barbeque-Nation Hospitality Private Limited.
5.2 The Applicant has submitted the relevant clauses of the Commercial Terms for Agreement to Sale, the relevant extracts of which are reproduced below:
(i) Operation Handover:
“Staff and faculty accommodation, all restaurant operations and recurring related costs will be taken over by the Buyer from the mutually agreed date.”
(ii) Handover of Seller’s Company Assets:
“The Seller shall hand over all the assets specified in Annexure-A to the Buyer on the date of signing the Letter of Intent and any expenses incurred thereon relating to the Seller’s Company Assets in the Annexure-A will be borne by the Buyer.”
5.3 The Applicant further submits that there are no liabilities pertaining to the said business undertaking, except the outstanding running costs relating to the restaurant operations. It is also submitted that none of the liabilities arising out of the past business operations, including but not limited to future payments, claims, statutory dues or any other liabilities, are proposed to be transferred to the Buyer.
5.4 The Applicant submits that, in consideration of the proposed transfer of the business, it shall receive an aggregate consideration of Rs. 75,00,000/- (Rupees Seventy-Five Lakhs only) from Barbeque-Nation Hospitality Private Limited.
5.5 The Applicant submits that it seeks to ascertain whether the proposed transfer of its business qualifies for exemption under Sl. No. 2 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, which exempts “services by way of transfer of a going concern, as a whole or an independent part thereof.”
Accordingly, the Applicant has filed the present application under Section 97 of the Central Goods and Services Tax Act, 2017, seeking an advance ruling on the applicability of the said exemption to the proposed transaction.
Applicant’s Interpretation of Law: –
6.1 The Applicant contends that the proposed transaction, when viewed in its entirety, constitutes the transfer of a running restaurant business as a going concern and not a mere sale of individual assets. Although the preamble to the Commercial Terms for Agreement to Sale dated 02.05.2024 describes the document as a Letter of Intent recording the parties’ intention to negotiate and execute a definitive agreement, the true nature of the transaction is to be ascertained from the operative clauses of the agreement and the commercial substance of the arrangement. It is the Applicant’s case that the character of a transaction is determined by its real substance and legal effect and not merely by the nomenclature adopted by the parties. Accordingly, the description of the document as a Letter of Intent or the reference to the “acquisition of assets” in the preamble cannot, by itself, determine the taxability of the transaction.
6.2 The Applicant further explains that the operative clauses of the agreement clearly establish that the transaction is one involving the transfer of a running business. In particular, Clause 3(B), titled “Operation Handover”, provides that “Staff and faculty accommodation, all restaurant operations and recurring related costs will be taken over by the Buyer from the mutually agreed date.” According to the Applicant, this clause is inconsistent with a mere transfer of movable assets, as a purchaser acquiring only furniture or kitchen equipment would not ordinarily assume the restaurant operations, staff arrangements and recurring operational costs. These, according to the Applicant, are attributes of a functioning business and not of an isolated asset sale. Further, Clause 3(C) provides for the handover of all assets specified in Annexure-A, together with the obligation upon the Buyer to bear the expenses relating thereto from the date of signing of the Letter of Intent. Accordingly, the Applicant contends that the agreement contemplates the transfer of a running restaurant business capable of continued commercial operation by the Buyer.
6.3 The Applicant states that Annexure-A merely identifies the assets forming part of the business being transferred. It is stated that the Annexure contains only an inventory of kitchen equipment, furniture, fixtures and other business assets and does not specify item-wise sale consideration, individual valuation of assets, depreciation-based pricing or allocation of the agreed consideration amongst individual assets. According to the Applicant, such absence of item-wise valuation is inconsistent with a conventional asset sale. Instead, the parties have agreed upon a single lump-sum consideration of Rs. 75,00,000/- for the entire business undertaking. Therefore, the Applicant states that the inventory serves only as a schedule identifying the assets transferred along with the business and not as a basis for determining the consideration payable for individual assets.
6.4 According to the Applicant, the agreement records the consideration of Rs. 75,00,000/- as being “inclusive of GST / other taxes.” The Applicant explains that this clause is merely a commercial safeguard incorporated to address uncertainty regarding the tax treatment of the transaction and cannot be construed as an admission that GST is payable. It is further stated that the taxability of a transaction is determined by the provisions of the CGST Act, the Rules made thereunder and the applicable notifications, and not by contractual stipulations agreed between the parties. Accordingly, if the transaction is held to be exempt under Entry No. 2 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, the GST component would be nil and the agreed consideration of Rs. 75,00,000/- would remain unchanged.
6.5 The Applicant asserts that the expression “going concern” occurring in Entry No. 2 of Notification No. 12/2017-Central Tax (Rate) is distinct from the accounting concept of a going concern. The Applicant explains that while accounting standards examine whether an enterprise is capable of continuing its existence despite financial difficulties, the exemption under the GST law is concerned with the transfer of a running business as a functioning commercial undertaking capable of being continued by the transferee. Accordingly, the Applicant asserts that a restaurant which is operational, adequately staffed and serving customers constitutes a going concern irrespective of whether it has accumulated profits or losses. It is therefore argued that importing accounting concepts into the notification would unduly restrict the scope of the exemption.
6.6 Without prejudice to the above, the Applicant argues that even if the transaction is regarded as comprising both the transfer of goods and the transfer of a business, it would constitute a composite supply within the meaning of Section 2(30) of the CGST Act, 2017. According to the Applicant, the transfer of furniture, kitchen equipment and fixtures is naturally bundled with the transfer of the restaurant business, and such assets merely facilitate the continuation of the business and do not constitute the principal object of the transaction. Therefore, the principal supply is the transfer of the restaurant business as a going concern and the tax treatment applicable to the principal supply should govern the entire transaction.
6.7 The Applicant further contends that the facts of the present case clearly distinguish the transaction from a mere sale of assets. The Buyer is engaged in the same line of business of operating restaurants; the Seller is transferring its restaurant business under the agreement; the restaurant operations are proposed to be handed over to the Buyer; the operational assets necessary to continue the business are being transferred; the parties have agreed upon a single lump-sum consideration without allocating separate values to individual assets; and the Buyer is in a position to continue the business immediately upon completion of the transfer. On the basis of these facts, the Applicant contends that the transaction represents a genuine transfer of a business undertaking as a going concern and not an artificial arrangement intended to avoid tax.
PERSONAL HEARING PROCEEDINGS HELD ON 30.07.2026:
7.1 Shri P. Parimal Prasad and Shri K.V. Balasubramanyam, Chartered Accountant, Authorised Representatives of the applicant, appeared before the Authorities and reiterated the facts and submissions already made in the original Advance Ruling application.
7.2 During the course of the hearing, the authorised representatives submitted that the Applicant had transferred all its business assets to Barbeque-Nation Hospitality Limited in terms of the Agreement to Sale dated 02.05.2024 for a total consideration of ₹75,00,000/-. They submitted that the issue for consideration is the taxability of the said transaction. According to the Applicant, the transaction amounts to a transfer of a going concern and is, therefore, exempt from GST under Entry No. 2 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017.
FINDINGS & DISCUSSION:
8. At the outset, we would like to make it clear that the provisions of the Central Goods and Services Tax Act, 2017 and the Karnataka Goods and Services Tax Act, 2017 are pari materia and contain identical provisions on all material aspects, differing only in respect of certain specific provisions. Accordingly, unless a particular reference is made to such dissimilar provisions, any reference to the CGST Act, 2017 shall also be construed as a reference to the corresponding provisions of the KGST Act, 2017.
9. We have considered the submissions made by the applicant in the application for advance ruling. We have also examined the issues on which the advance ruling has been sought, the relevant facts of the case, and the arguments advanced by the applicant, including the submissions made by the applicant during the course of the personal hearing.
10. We have carefully considered the submissions made by the Applicant in the application for advance ruling, the additional written submissions and the submissions made by the authorised representative during the course of personal hearing. We have also examined the questions on which the advance ruling has been sought, the relevant provisions of the CGST Act, 2017 and the documents placed on record.
11. The Applicant seeks an advance ruling on the following questions:
(i) Whether transfer of business is to be construed as “transfer of a going concern as a whole or an independent part thereof”
(ii) If not, the applicable rate of tax and the valuation of such transfer.
We proceed to examine the issues.
12. Whether transfer of business is to be construed as “transfer of a going concern as a whole or an independent part thereof?
a) We observe that the Applicant is engaged in the business of providing hospitality services, including operating restaurants. The Applicant has entered into Commercial Terms for Agreement to Sale dated 02.05.2024 with Barbeque-Nation Hospitality Private Limited for the transfer of its restaurant business.
b) Further, the Applicant has submitted the Handover Letter and Asset Transfer Acknowledgement Letter dated 07.05.2024, executed pursuant to the Commercial Terms for Agreement to Sale dated 02.05.2024 between the Applicant and M/s Barbeque-Nation Hospitality Pvt. Ltd. The said documents record the transfer of the overall restaurant operations, including the associated staff, faculty accommodation and recurring operational costs, to the Buyer from the effective date of handover. The Applicant has further certified that all physical assets, equipment, fixtures, furniture, kitchen appliances and stock items specified in Annexure-A were physically verified, counted and handed over to the Buyer in working condition as on the date of handover. It is also provided that any maintenance, repair, operational or insurance expenses relating to such assets incurred after the signing of the Handover Letter shall be borne entirely by the Buyer.
12.1 To determine the aforesaid issue, it is necessary, first, to examine whether the transfer of business by the applicant to M/s Barbeque-Nation Hospitality Private Limited constitutes a ‘supply’ within the meaning of Section 7 of the CGST Act, 2017. If the transaction is held to constitute a supply, it is then necessary to determine the nature of such supply and examine whether the same qualifies for the specific exemption provided under Entry No. 2 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017.”
12.2 To determine whether the transfer of business by the applicant to M/s Barbeque-Nation Hospitality Private Limited constitutes a “supply”, it is necessary to examine the scope of the term “supply” under Section 7 of the CGST Act, 2017.
12.3 Section 7– Scope of supply:-
Section 7(1)(a) of the CGST Act, 2017 provides, inter alia, that the expression “supply” includes all forms of supply of goods or services or both, such as sale, transfer, barter, exchange, licence, rental, lease or disposal, made or agreed to be made for a consideration by a person in the course or furtherance of business.
Thus, for determining whether the transaction under consideration falls within the scope of Section 7(1)(a), the following essential elements are required to be examined:
(i) whether there is a supply of goods or services or both;
(ii) whether such supply is made or agreed to be made for a consideration;
(iii) whether such supply is made by a “person”; and
(iv) whether such supply is made in the course or furtherance of business.
12.4 The term “person” is defined under Section 2(84) of the CGST Act, 2017. Clause (e) thereof specifically includes “a Limited Liability Partnership” within the definition of “person”. The applicant being a Limited Liability Partnership, it falls within the scope of the expression “person” for the purposes of the CGST Act, 2017.
12.5 The term “consideration” is defined under Section 2(31) of the CGST Act, 2017. The definition, inter alia, includes any payment made or to be made, whether in money or otherwise, in respect of, in response to, or for the inducement of, the supply of goods or services or both.
In the instant case, pursuant to the Commercial Terms for Agreement to Sale dated 02.05.2024, M/s Barbeque-Nation Hospitality Private Limited is required to pay a consideration of Rs. 75,00,000/- to the applicant in accordance with the terms and conditions stipulated therein. Accordingly, the transaction is undertaken for consideration and is not gratuitous in nature.
12.6 Further, Section 2(17) of the CGST Act, 2017 defines “business” in an inclusive manner. The definition, inter alia, covers trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not undertaken for a pecuniary benefit, as well as activities or transactions incidental or ancillary thereto and certain activities relating to the commencement or closure of business.
The applicant, being engaged in the hospitality sector and undertaking activities including operation of hotels, restaurants and cafés, as well as activities as collaborator, franchiser, technical consultant and marketer for hotels, motels and other hospitality establishments, is carrying on business within the meaning of Section 2(17) of the CGST Act, 2017. The transaction contemplated under the Commercial Terms for Agreement to Sale is connected with and arises in the course or furtherance of such business.
12.7 In the present case, the applicant has entered into the Commercial Terms for Agreement to Sale dated 02.05.2024 with M/s Barbeque-Nation Hospitality Private Limited for transfer of its business for a consideration of Rs. 75,00,000/-, subject to the terms and conditions stipulated therein. The transaction, therefore, involves a transfer of business for consideration between persons in the course or furtherance of business.
12.8 On a cumulative consideration of the above facts and the statutory provisions, we find that the essential ingredients of Section 7(1)(a) of the CGST Act, 2017 are satisfied. The transaction involves a transfer of business, is undertaken for consideration, is between persons and is connected with the business activities of the applicant. Accordingly, the transaction falls within the ambit of “supply” as defined under Section 7(1)(a) of the CGST Act, 2017.
12.9 In view of the foregoing discussion, we hold that the transaction contemplated under the Commercial Terms for Agreement to Sale dated 02.05.2024 between the applicant and M/s Barbeque-Nation Hospitality Private Limited constitutes a “supply” within the meaning of Section 7(1)(a) of the CGST Act, 2017.
13.1 Having held that the transaction contemplated under the Commercial Terms for Agreement to Sale dated 02.05.2024 constitutes a “supply” under Section 7(1)(a) of the CGST Act, 2017, the next issue for consideration is whether such supply is in the nature of “services by way of transfer of a going concern, as a whole or an independent part thereof”, as specified in Entry No. 2 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017.
13.2 The expression “going concern” has not been specifically defined under the CGST Act, 2017. Therefore, the determination of whether a transaction amounts to a transfer of a going concern has to be made by examining the substance and overall effect of the transaction, particularly whether an existing business undertaking is transferred as a functioning economic activity capable of being carried on by the transferee.
The essential consideration is not merely whether individual assets are transferred, but whether the business activity as an operational and functional unit is transferred in such a manner that the transferee is in a position to continue the same business after the transfer.
13.3 In the instant case, Clause 3(B) of the Commercial Terms for Agreement to Sale, relating to “Operation Handover”, provides for the takeover of the restaurant operations by the Buyer from the mutually agreed date, along with the associated staff and recurring operational costs. Further, Clause 3(C) provides for the handover of the assets specified in Annexure-A.
The above provisions indicate that the subject transaction is not restricted to the sale or transfer of identified assets in isolation. Rather, the arrangement contemplates the transfer and takeover of the ongoing restaurant operations together with the assets and operational elements required for carrying on such business.
13.4 The above position is further corroborated by the Handover Letter and Asset Transfer Acknowledgement Letter dated 07.05.2024, executed pursuant to the Commercial Terms for Agreement to Sale dated 02.05.2024. The said documents record the actual handover of the restaurant operations to the Buyer, including the associated staff, faculty accommodation and recurring operational costs.
The documents further record that the physical assets, equipment, fixtures, furniture, kitchen appliances and stock items specified in Annexure-A were physically verified and handed over to the Buyer in working condition. The responsibility for maintenance, repairs, operational expenses and insurance in respect of the transferred assets has also been assumed by the Buyer subsequent to the handover.
13.5 Thus, the transaction is not merely an arrangement for transfer of ownership of certain assets. The transfer encompasses the business activity being carried on through those assets, together with the operational arrangements necessary for continuation of the restaurant business. The actual handover of the business operations and the assets pursuant to the agreement is a significant factor in determining the nature of the transaction.
13.6 We also note that the assets forming part of the transaction have been identified in Annexure-A, which includes the relevant physical assets, kitchen equipment, cutlery and other items used in the restaurant business. However, no separate consideration has been assigned to each individual asset. Instead, the parties have agreed upon a single lump-sum consideration of Rs. 75,00,000/- for the transaction.
While the absence of item-wise valuation, by itself, cannot be regarded as conclusive evidence of a transfer of going concern, the same, when considered along with the transfer of the restaurant operations and the assets necessary for carrying on those operations, supports the conclusion that the intention of the parties is to transfer the business undertaking as an operational whole, rather than to effect a mere sale of individual assets.
13.7 We further take note of the Applicant’s submission that, except for the outstanding costs relating to the running of the restaurant, the liabilities arising from the past operations of the business are not proposed to be transferred to the Buyer.
In this regard, we are of the view that transfer of all the past liabilities of a business is not an indispensable condition for determining whether a transaction constitutes a transfer of a going concern. The determination has to be made on the basis of the transaction as a whole and, more particularly, whether the essential elements of the business activity have been transferred so as to enable the transferee to carry on the business independently after the transfer.
Therefore, the mere retention or exclusion of certain past liabilities by the transferor cannot, in isolation, alter the character of an otherwise identifiable transfer of a functioning business undertaking.
13.8 In the present case, the facts establish that:
(i) the existing restaurant operations are being handed over to the Buyer;
(ii) the associated staff and recurring operational costs are taken over as contemplated under the agreement;
(iii) the assets, equipment, fixtures, furniture, kitchen appliances, stock items and other operational assets forming part of the restaurant have been handed over to the Buyer;
(iv) the assets were physically verified and handed over in working condition;
(v) the Buyer has assumed responsibility for maintenance, repairs, operational expenses and insurance relating to the transferred assets after the handover; and
(vi) the transaction is for a single lump-sum consideration and is not structured merely as separate sales of individual assets.
These circumstances, when considered cumulatively, demonstrate that what is transferred is not merely a collection of assets but the restaurant business as an identifiable and functioning economic activity.
13.9 We further observe that the relevant question is whether the undertaking transferred is capable of being continued as a business by the transferee. In the instant case, the Buyer has taken over the restaurant operations along with the assets and other operational elements necessary for carrying on the activity. The transaction, therefore, enables the Buyer to continue the restaurant business following the handover.
The continuity of the business activity, coupled with the transfer of the assets and operational arrangements necessary for such activity, establishes the requisite functional continuity of the undertaking.
13.10 In view of the foregoing discussion and considering the substance of the transaction as a whole, we find that the Commercial Terms for Agreement to Sale dated 02.05.2024, read with the subsequent Handover Letter and Asset Transfer Acknowledgement Letter dated 07.05.2024, contemplate and give effect to the transfer of the restaurant business as a functioning undertaking, together with the assets and operational elements necessary for its continued operation.
Accordingly, the transaction satisfies the essential characteristics of a transfer of a going concern and is not in the nature of a mere transfer of individual assets.
13.11 In view of the above findings, we hold that the transfer of the restaurant business by the Applicant to M/s Barbeque-Nation Hospitality Private Limited constitutes “services by way of transfer of a going concern, as a whole or an independent part thereof” and is covered under Entry No. 2 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. Consequently, the said supply is exempt from GST.
14. The next question raised by the Applicant is, “If it is dissentient, what is the rate applicable to such transfer and how is the value of each item of such transfer to be determined?” In view of our finding on the preceding question that the transaction is a transfer of a going concern, the question does not arise for consideration. Accordingly, no ruling is required on the said question.
15. In view of the foregoing, we pass the following.
Ruling
Question.1:- Whether such transfer of business is to be construed as transfer of a going concern as whole or independent part thereof?
Answer:- The transfer of the restaurant business constitutes transfer of a going concern as a whole or an independent part thereof and is exempt from GST under Entry No. 2 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017.
Question.2:- If it is dissentient, what is the rate applicable to such transfer and how to determine the value of each item of such transfer?
Answer: – In view of the ruling on Question No. 1, this question does not survive for consideration and, therefore, does not require any ruling.
