GST Liability in certain cases:


GST Liability in certain cases:

In GST Era, there are certain situation under which your liability is still remain outstanding even if your business has been closed or Discontinue or Transfer or merge with another business.

Following are situation in which businessman is required to pay GST:

a) Liability in case of transfer of business:

According to section 85 of the Act, If a taxable person has transfer his business with pending tax dues to another person, then the taxable person and the person to whom business is transferred shall be jointly and severally be liable to pay the tax, interest or penalty due from the taxable person up to the time of such transfer.

b) Liability in case of Agent and Principal:

According to section 86 of the Act, Where an agent supplies or receives any taxable goods on behalf of his principal, such agent and his principal shall, jointly and severally, be liable to pay the tax payable on such goods.

c) Liability of Partners of the firms to pay the taxes:

According to section 90 of the Act, If any partner is retired from the firm, then the Firm/Partner shall intimate the retirement of such partner to the commissioner by a notice in writing. Liability to pay tax, interest or penalty up to the date of such retirement, whether determined on that date or subsequently, shall be on such partner.

If no intimation is given within one month from the date of retirement, the liability of such partner shall continue until the date on which such intimation is received by the commissioner.

d) Liability in case of company in liquidation:

According to section 88 of the Act, when any company is wound up, every appointed receiver of assets (“liquidator”) shall give intimation of his appointment to commissioner within 30days. On receipt of such intimation, commissioner may notify amount sufficient to recover tax liabilities/dues to the liquidator within 3 monthswhich needs to be provided by the said liquidator.

e)Liability in case of Guardians, trustees etc:

According to section 91 of the Act,Where the business in respect of which any tax is payable is carried on by any guardian/ trustee/agent of a minor or other incapacitated person on behalf of and for the benefit of such minor/ incapacitated person, the tax, interest or penalty shall be levied upon and recoverable from such guardian/ trustee/agent.

f) Liability in case of Amalgamation or merger of companies:

According to section 91 of the Act, when two or more companies are amalgamated or merged in pursuance of any court order or otherwise and order is with effect from earlier date, then the goods supplied or received from others from the date from which order take effect till the date of order, will be included in the turnover of the respective companies and they shall be liable to pay taxes accordingly.