Levy of GST— In the instant case, the applicant stated that they are a private limited company, a start-up based in Bengaluru, with the focus on providing data analytics, digital marketing services product development; registered under CGST/KGST Act 2017. 

The applicant own a mobile application, developed and owned by them, called as “LoanFront”, which is a Fintech product and is used as a digital platform to facilitate lending of short term personal loans; they intend to transfer the said mobile application software to their wholly owned subsidiary M/s Vaibhav Vyapaar Private Limited (WPL).

In view of the above, the applicant has sought advance ruling in respect of the following question:-

a. Whether the GST would be applicable on the aforesaid transfer of mobile application software?

In view of the above, the issue before us to decide is whether the impugned transfer of part of the applicant's business related to “LoanFront” App qualifies to be a service by way of transfer of going concern and thereby exempted or not in terms of Notification 12/2017.

The phrase 'going concern' is not defined under the CGST / KGST Act 2017. Going concern is an accounting term referring to a business entity which will continue running its operations in the foreseeable future and will not be liquidated or forced to discontinue operations for any reason.

Held that— The transfer of independent part of business pertaining to “LoanFront” app, a mobile software, qualifies to be a transfer of going concern, and the said activity amounts to “Service by way of transfer of going concern as an independent part” and thus is exempted from GST in terms of SI.no.2 of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended.