Inter-State Transfer of ITC on Merger: Kerala AAR Opens the Door for Cross-GSTIN Credit Movement

When companies merge across State lines, assets and liabilities travel seamlessly on paper. But does the Input Tax Credit (ITC) sitting in one State’s electronic credit ledger have the same freedom of movement? The Kerala Authority for Advance Ruling (AAR), in M/s Flytxt Mobile Solutions Pvt. Ltd. - AAR No. KER/23/2025, dated 23 July 2025, has given a significant and taxpayer-friendly answer: yes, ITC in the form of CGST and IGST can be transferred...... Read More

Authority

One liner

Gujarat High Court

On amalgamation, unutilised ITC must travel only through the Section 18(3)/Rule 41 (ITC-02) route; refund u/s 54(3) can’t be used to bypass that statutory mechanism.