Since proprietorship concern has no long-lasting existence, sole proprietorship comes to an end if the proprietor dies. The GST registration is a PAN-based registration. In case of death of the sole proprietor, If the business is to be carried on by the legal heir, he cannot continue with the existing GST registration, since the legal heir will be having a different PAN Number. Thus, the legal heir needs to take a new registration if not already registered and also ensure that the balance of ITC lying in the electronic credit ledger of the sole proprietor is transferred to him. Also, the legal heir has to file the application for cancellation of GST registration on account of the death of the sole proprietor.
There can be 2 circumstances on the death of the sole proprietorship either the business can be transferred legal heir or the business can be discontinued.
It is not advised to continue the business in the deceased name & GST number, It would be better to form a new proprietorship firm.
Steps to be followed
- The legal heir has to meet the Jurisdiction Officer and submit the death certificate as documentary evidence
- Proper Officer will add legal heir as the authorized signatory on the GST Portal.
- Legal heirs have to apply for new GST registration & mention the reason to obtain registration as “death of the proprietor” in Form GST REG‐1
- Apply for the transfer of ITC by filing FORM GST ITC–02 to a new entity.
- The legal heir or his/ her authorized signatory has to submit the application for cancellation and select the “Death of Proprietor” in Form GST REG‐16