Page 229 - CA Final GST

Badlani Classes

Chapter : 20

Liability to Pay in Certain Cases

Liability to Pay in GST Law has provisions for special cases like transfer of business, where the
certain cases transferee and transferor are both held liable to pay unpaid GST. These
provisions come into force when there is an amount due under GST (tax,
interest, penalty) which cannot be recovered from the taxpayer directly.
Sections 85 to 94 of the CGST Act, 2017 deals with the liability to pay in
certain cases.

Section Case Person liable to pay GST Remarks
85(1) & Liability in case of The taxable person (transferor) • It is immaterial if such
(2) transfer of business and the person to whom the tax, interest, or penalty
business is transferred has been determined
(transferee) will be liable, before or after the
jointly and severally, wholly or transfer, as long it is
to the extent of such transfer, to unpaid.
pay the GST due. • If the transferee carries
Note:- The transferee will be on the business in a
liable to pay GST from the date new name (which is
of transfer. different from
original) then he must
apply for amendment
of his registration
certificate.
86 Liability of agent If an agent supplies or receives Supply of goods to agent by
and principal any taxable goods on behalf of principal covered under
his principal, then both the Schedule II of CGST Act,
agent and the principal will be 2017 and the same treated
liable to pay GST, jointly and supply of goods even
severally. without consideration.
87 Liability in case of The two or more companies are If two or more companies
amalgamation or individually responsible for mere/amalgamate:
merger of companies their taxes. • Due to the order of a
court/tribunal
• The order is to take
effect from a date
earlier to the date of
the order (i.e.
retrospective effect)
• The companies have
supplied
goods/services to each
other during that
period (From order
date to order effect
date) Page228

Central Goods & Services Tax Act, 2017