VAT - Demerger

Value Added Tax (VAT)

It is levied on sales. VAT is levied and collected by States in India. However, basic structure all over the country remains same. In merger, various issues like registration requirements, VAT credit availability to the transferee company are the issues that may arise

Various issues arising in the demerger are-

Definition of demerger covered by VAT laws

Requirement of Cancellation of registration

Communication of demerger to authorities.

Liability of Successor

Condition for grant of set-off or refund and adjustment of draw-back, set-off in certain circumstances.