1. Standardised PPT on GST
Indirect Taxes Committee
The Institute of Chartered Accountants of India

2. Disclaimer and Copy right
This presentation has been prepared to provide a standard ‘user presentation’. The views expressed in this presentation are those of Speaker(s). The Institute of Chartered Accountants of India may not necessarily subscribe to the views expressed by the speaker(s). The information cited in this presentation has been drawn from various sources. While every efforts have been made to keep the information cited in this presentation error free, the Institute or any office do not take the responsibility for any typographical or clerical error which may have crept in while compiling the information provided in this presentation. Further, the information provided in this presentation are subject to the provisions contained under different acts and members are advised to refer to those relevant provision also. For clarifications write to us at
© The Institute of Chartered Accountants of India
This standardised PPT may be used by any person with due acknowledgement to the Indirect Taxes Committee of ICAI.

3. Liability to Pay in Certain Cases

4. Liability In Case of Transfer of Business – Sec 85
The provision applies when a taxable person who is liable to pay tax consequent to transfer of his business either wholly or in part. .
Sale;
Gift;
Lease;
Leave and license;
Hire; or
In any other manner
The transfer of business could be by way of:
Both transferor and transferee are jointly and severally liable for payment of amounts due upto the time of transfer of business (wholly or partly) .
Tax liability
Interest
Penalty

5. Liability In Case of Transfer of Business – Sec 85
Such amounts payable may have been
determined and due before the transfer or
determined after the transfer.
Penalty, which is quasi-criminal, to be on the transferee, though he would not have been responsible for the non-payment prior to transfer of business.

6. Liability In Case of Transfer of Business – Sec 85
  (ii) Liability arising post transfer:
Liability to pay tax on supply made after transfer on the transferee
If business continued and the transferee is already registered, he needs to apply for amendment of his registration within the prescribed time incorporating the changes as to the acquisition of the business

7. Liability In Case of Agent and Principal – Sec 86
Sec 86 is applicable when an agreement is made between the principal and his agent.
When goods are supplied or received by an agent on behalf of the principal, both are jointly and severally liable for payment of tax .

8. Liability In Case of Acquisition or Merger of Companies – Sec 87
In cases of amalgamation or merger of two or more companies by virtue of order passed by Tribunal / Court / CG the following two crucial dates are relevant, -
Date from which the amalgamation / merger is effective;
Date of the order pursuant to which the amalgamation / merger takes place;
Till the date of order of amalgamation/merger, those companies shall be treated as distinct companies and should discharge their respective tax liabilities.
Between the effective date of amalgamation and date of order, any supplies between each other to be included in the turnover/receipt of respective companies
This provision would eclipse the order of the Court/Tribunal/CG and its legal effect. Registration certificates of the companies to be cancelled from the date of the said order.

9. Liability In Case of Company in Liquidation – Sec 88
The liquidator appointed shall give the intimation of his appointment to the Commissioner within 30 days of his appointment
The Commissioner may make such inquiry or call for such information he may deem fit.
Commissioner shall inform the liquidator the tax, interest or penalty to be paid or likely to be payable by the company , within 3 months of receipt of such intimation.
Every director of the company during liquidation is jointly and severally liable for non- payment of tax , interest or penalty
If proved that non-payment of the above amount was not attributable to any gross neglect, misfeasance or breach of duty on the part of director, they shall not be held liable.

10. Liability of Directors In Case of Private Company – Sec 89
Director to be jointly and severally liable for payment of tax, interest or penalty if not recovered from the company
When a private company is unable to pay, the directors of the company deemed to be liable to pay such amount.
Every person who was a director of the said company shall be jointly and severally liable
If proved that the non-recovery cannot be attributed to any gross neglect, misfeasance or breach of duty on the directors part, he shall not be liable

11. Liability of Directors In Case of Private Company – Sec 89
Conversion of private company into public company
If tax, interest and penalty cannot be recovered for the period prior to conversion, then the exemption as per the last slide is not available.
No personal liability imposable on a director

12. Liability of Partners of Firm To Pay Tax – Sec 90
(i) All the partners of a firm are severally and jointly liable for liability of the firm; (ii) Retiring partner should intimate the Commissioner in writing within one month of retirement; (iii) Retiring partner liable upto the date of his retirement (whether determined or not prior to retirement); (iv) The liability of the retiring partner to continue till the intimation is received by the Commissioner.

13. Liabilities of Guardians, Trustees, etc – Sec 91
(i) In respect of business carried on for the benefit of a minor or incapacitated person, the person shall be liable to tax is:
Guardian; or
Trustee; or
Agent;
(ii)The tax, interest, penalty or any other dues which are recoverable from the minor or any such incapacitated person are
levied, assessed in the hands of guardian, trustee or agent.
collected from the guardian, trustee or agent.
(iii) The dues are recoverable from the guardian, trustee or agent in respect of business of the minor or other incapacitated person by treating them as major or capacitated person, who is conducting the business for himself.
(iv) The deeming fiction is required to overcome the general principle of law, which operates n favour of a minor or incapacitated person to plead minority or incapacity in respect of dues or claims, particularly penal liability.
(v) Interestingly the expression ‘incapacitated person’ is not defined in the Act. It should refer only to a person who is a person of unsound mind or terminally ill.

14. Liability of Court of Wards, etc – Sec 92
The following persons liable to discharge the tax, interest or penalty payable of the business of the taxable person whose estate or part thereof is under their control:
Any other person by whatever name and the designation called, who in fact actually manages the business.
Court of Wards or
Administrator general or
Official trustee or
Any receiver or manager, or
Tax, interests or penalty will be recovered from them as if they themselves were conducting the business.

15. Special provisions regarding liability to pay tax, Interest or penalty in certain cases – Sec 93
Person liable to pay dies
If business continued after death
If business discontinued before or after death
Legal Representative or any other person who carries on the business is liable to pay.
Legal Representative liable
Liability to the extent that the estate of the deceased is capable
Liability to occur for amount determined before death though unpaid or determined after death

16. Special provisions regarding liability to pay tax, Interest or penalty in certain cases – Sec 93
Partition of HUF or AOP
The property may be partitioned amongst various members
Each member jointly and severally liable for liability of the HUF or AOP
Each member liable upto the date of partition (whether determined or not prior to partition);

17. Special provisions regarding liability to pay tax, Interest or penalty in certain cases – Sec 93
Dissolution of Firm
All the partners of a firm are severally and jointly liable for liability of the firm;
Each partner liable till the completion of dissolution.
Each member liable to pay :
whether determined before the dissolution, but has remained unpaid ;
whether determined after the dissolution.

18. Special provisions regarding liability to pay tax, Interest or penalty in certain cases – Sec 93
Termination of Guardianship or Trusteeship
Business carried on by guardian or trustee on behalf of ward or beneficiary.
Beneficiary or ward liable for liability of business upto the termination of guardianship or trust
Beneficiary or ward liable to pay :
whether determined before the dissolution, but has remained unpaid ;
whether determined after the dissolution

19. Liability In Other Cases – Sec 94
Discontinuance of Business
If firm/AOP/HUF liability is determined upto the date of discontinuance, it is to determined as if no discontinuance has taken place.
Every partner of firm/member of association or family are jointly and severally liable
Each such person liable to pay :
whether determined before the dissolution, but has remained unpaid ;
whether determined after the dissolution

20. Liability In Other Cases – Sec 94
Change in the constitution of the firm or association
Every partner of firm or member of association or family such person existing before and which exists after the reconstitution
jointly and severally liable
for the period before the reconstitution.
Explanation –
LLP to be considered as a firm.
Court means the District Court, High Court, Supreme Court.

21. Liability In Other Cases – Sec 94
Partition of HUF or Dissolution of Firm / AOP
If firm/AOP/HUF liability is determined upto the date of dissolution or partition, it is to determined as if no dissolution or partition has taken place.
Every partner of firm/member of association or family are jointly and severally liable
Each such person liable to pay :
whether determined before the dissolution or partition, but has remained unpaid ;
whether determined after the dissolution or partition;

22. Thank You For any Clarification, Please Contact
Indirect Taxes Committee of ICAI
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