In the GST era, there are certain situations under which your liability is still remain outstanding even if your business is closed or discontinue or transferred or merged with another business.

Following are the situations in which the businessmen are required to pay GST:

1. Liability in case of transfer of business

According to section 85 of the Act, if a taxable person has transfer his business with pending tax dues to another person, then the taxable person and the person to whom business is transferred shall be jointly and severally be liable to pay the tax, interest or penalty due from the taxable person up to the time of such transfer.

2. Liability in case of agent and principal

According to section 86 of the Act, where an agent supplies or receives any taxable goods on behalf of his principal, such agent and his principal shall, jointly and severally, be liable to pay the tax payable on such goods.

3. Liability of partners of the firms to pay the taxes

According to section 90 of the Act, if any partner is retired from the firm, then the firm/partner shall intimate the retirement of such partner to the commissioner by a notice in writing. Liability to pay tax, interest or penalty up to the date of such retirement, whether determined on that date or subsequently, shall be on such partner.

4. Liability in case of company in liquidation

According to section 88 of the Act, when any company is wound up, every appointed receiver of assets (“liquidator”) shall give intimation of his appointment to commissioner within 30days. On receipt of such intimation, commissioner may notify amount sufficient to recover tax liabilities/dues to the liquidator within 3 month switch needs to be provided by the said liquidator.

5.  Liability in case of guardians, trustees etc.

According to section 91 of the Act, where the business in respect of which any tax is payable is carried on by any guardian/ trustee/agent of a minor or other incapacitated person on behalf of and for the benefit of such minor/ incapacitated person, the tax, interest or penalty shall be levied upon and recoverable from such guardian/ trustee/agent.

6.  Liability in case of amalgamation or merger of companies

According to section 91 of the Act, when two or more companies are amalgamated or merged in pursuance of any court order or otherwise and order is with effect from earlier date, then the goods supplied or received from others from the date from which order take effect till the date of order, will be included in the turnover of the respective companies and they shall be liable to pay taxes accordingly.