LIABILITY TO PAY TAX IN CERTAIN CASES – PART-1
By: – Dr. Sanjiv Agarwal
Goods and Services Tax – GST
Dated:- 20-10-2016
Chapter XXII of the Model Law contains Chapter XXII comprising of sections 108 to 115 which deal with liability to pay GST in eight special cases as follows :
Section
Liability
108
Liability in case of transfer of business
109
Liability in case of amalgamation / merger of companies
110
Liability in case of company in liquidation
111
Liability of partners of firm to pay tax
112
Liability of guardians, trustees etc
113
Liability of Court of Wards etc.
114
Special provision regarding liability to pay tax in certain cases (death, discontinued business, hindu undivided family or association of
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irrespective of :
* Consideration
* Mode and manner of transfer
* Transfer in whole or part
* Determination or not of liability
The only pre-requisite is that such tax liability should have remained unpaid or is determined after such transfer.
The transferee or lessee shall be jointly and severally liable to pay –
* Tax
* Interest
* Penalty
due from or payable by such payable person (transferor)
The transferee may carry on business in his own name or some other name. He shall-
* get his certificate of registration amended appropriately within prescribed time.
* pay GST w.e.f. date of transfer on taxable supply of goods and / or services
Business transfers covered under section 109 would inter alia include –
* Sale,
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supplied or received any goods and/or services to or from each other during the period commencing on the date from which the order takes effect till the date of the order, then such transactions of supply and receipt shall be included in the turnover of supply or receipt of the respective companies and shall be liable to tax accordingly. Thus, till the date of order of merger or amalgamation is pronounced, companies under the scheme shall be treated as distinct companies and shall be liable to discharge respective tax liabilities.
In case of merger and amalgamation, the scheme may fix an 'appointed date' for such merger or amalgamation and the Court / Tribunal order may be on a different date. The actual date of order and effective
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