Liability of Company in liquidation under GST

By | October 23, 2016
(Last Updated On: October 23, 2016)

Liability of Company in liquidation under GST

In case where a company, being a taxable person goes into liquidation or is being wound up and there are unpaid tax dues determined before or after such liquidation, every person who was a director of the company during the period for which the tax  was due, shall jointly and severally be liable for payment of dues unless he proves to the satisfaction of the Commissioner that such non-recovery is not attributed to any gross neglect, misfeasance or breach of duties on his part in relation to the affairs of the company.

For the purpose of understanding ‘company’ in liquidation, company means the     company as defined in section 2 (20, 68) of the Companies Act, 2013. Accordingly, a ‘company’ means a company incorporated under theCompanies Act, 2013 or any previous company law. A company maybe a company limited by shares or by guarantee. A company is incorporated under section 3 of the Companies Act, 1956.

In case of company under liquidation, every person appointed by an order of the   Court/Tribunal as receiver of any assets of a company (liquidator) shall within thirty days of his appointment, give intimation of his appointment to the Commissioner. Commissioner to notify the liquidator within 3 months from the date on which he receives intimation of the appointment of the liquidator, the amount of tax, interest or penalty which is payable by the company.

While every person who was a director of company during the period of liability, independent directors who are not involved in affairs of the company and are    able to prove that non-recovery can not be attributed to gross neglect, misfeasance or breach of duty on their part, may not be liable for recovery from them.

Chapter XXII of the Model GST 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

108Liability in case of transfer of business
109Liability in case of amalgamation / merger of companies
110Liability in case of company in liquidation
111Liability of partners of firm to pay tax
112Liability of guardians, trustees etc
113Liability of Court of Wards etc.
114Special provision regarding liability to pay tax in certain cases (death, discontinued business, hindu undivided family or association of persons, on partition, dissolution of firm, termination of guardianship or trust etc).
115Liability in other cases (discontinued business of HUF, firm, AOP; change in constitution of firm or AOP etc.)

Free Education Guide on Goods & Service Tax (GST)


SR No

Topic -GST

Resources

1

Model GST Law

Model GST Law

2

GST Overview

Goods and Services Tax (GST): An Overview

Integrated Goods & Service Tax (IGST) Act Overview

Meaning and Scope of Supply

Time of Supply

Place of Supply of Goods and Service under GST

Valuation in GST

Levy of GST & Exemption from Tax

Job Work under Goods & Service Tax (GST)

Electronic Commerce under Goods & Service Tax (GST)

3

Transition to GST

Transitional Provisions in Goods & Service Tax (GST)

4

Registration

GST Registration FAQ’s

GST Registration Process -Video

GST -Draft Registration Rules

GST -Draft Registration Formats

5

Invoice

GST Draft Invoice Rules released by CBEC

GST Draft Invoice formats Released by CBEC

6

Input Tax Credit

Input Tax Credit under Goods & Service Tax (GST)

Concept of Input Service Distributor in Goods & Service Tax (GST)

7

Payment

GST Payment of Tax

GST Draft Payment Rules Released by CBEC

GST Draft Payment formats Released by CBEC

8

Refunds

Refund under GST

Draft GST Refund Forms released by CBEC

Draft GST Refund Rules released by Govt

9

Returns

Returns Process and matching of Input Tax Credit under GST

Draft GST Return Rules Released by Govt

Draft GST Return Formats released by Govt

10

Assessment and Audit

Assessment and Audit under GST

11

Inspection, Search, Seizure and Arrest

Inspection, Search, Seizure and Arrest under GST

12

Offences, Penalty, Prosecution & Compounding

Offences, Penalty, Prosecution & Compounding in GST

13

Demands and Recovery

Demands and Recovery under GST

14

Appeals and Review

Appeals, Review and Revision in GST

15

Advance Ruling

Advance Ruling in Goods and Service Tax (GST)

16

Settlement Commission

Settlement Commission in Goods and Service Tax (GST)

17

GST Portal

Frontend Business Process on GST Portal

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