1. Introduction: In the intricate landscape of taxation, comprehending the provisions related to the transfer of tax liability is paramount. Sections 85 to 94 of the CGST Act delineate the rules governing this transfer, especially when the GST amount cannot be recovered directly from the taxpayer. This article explores the scenarios where such transfers apply, ranging from business transfers to instances of death or insolvency.

    Key Provisions Under Sections 85 to 94:

    1. Liability in Case of Business Transfer (Section 85):

      • Both the transferor and transferee are jointly and severally liable to pay GST after a business transfer.
      • The transferee is liable from the date of transfer, irrespective of when the tax, interest, or penalty was determined.
    2. Liability of Agent and Principal (Section 86):

      • If an agent supplies or receives taxable goods on behalf of the principal, both are jointly and severally liable for GST.
    3. Liability in Amalgamation or Merger of Companies (Section 87):

      • Amalgamated/merged companies are individually responsible for their taxes.
      • Distinct status under GST until the amalgamation order’s date, with registrations getting canceled on that date.
    4. Liability in Case of Company in Liquidation (Section 88):

      • Appointed receiver must inform the Commissioner within 30 days.
      • Directors jointly and severally liable for dues if the company fails to clear them.
    5. Liability of Directors of a Private Company (Section 89):

      • Directors liable for tax, interest, or penalty if not recovered from a private company, unless they prove non-recovery isn’t due to negligence.
    6. Liability of Partners of a Firm/LLP (Section 90):

      • Partners jointly and severally liable for GST payment, overriding limited liability in LLPs.
    7. Liability of Guardians, Trustees, etc. (Section 91):

      • Tax, interest, or penalty levied on both the guardian/trustee/agent and the beneficiary.
    8. Liability of Court of Wards, etc. (Section 92):

      • Court of Wards, Administrator General, Official Trustee, or receiver/manager liable for GST dues.
    9. Liability After the Death of the Taxpayer (Section 93):

      • Legal heir/representative liable for unpaid GST dues if business continues.
    10. Liability of Partnership Firm on Dissolution (Section 94):

      • Each partner jointly and severally liable for GST dues up to the date of dissolution.
    11. Liability of HUF/AOP on Partition (Section 94):

      • Members or groups liable for all GST dues up to the partition date.
    12. Liability When a Trust is Terminated (Section 94):

      • Beneficiary held liable for unpaid GST dues if the guardianship or trust is terminated.
    13. Liability in Cases of Reconstitution of Firm/AOP (Section 94):

      • Partners/members before reconstitution jointly and severally liable for dues up to the date of reconstitution.

    Conclusion: Understanding these provisions is crucial, as situations may arise where it’s challenging to collect tax dues directly from a taxpayer. The government is vigilant about collecting tax dues and has enacted provisions under GST to fix liability in various scenarios. A comprehensive understanding of these provisions is essential to accurately determine GST liability and prevent future tax litigations.