Section 94 of CGST Act 2017: Liability in Other Cases

Provisions under Section 94 of the Central Goods and Services Tax (CGST) Act, 2017 relating to “Liability in Other Cases”, are as under:

Section 94 of CGST Act 2017: Liability in Other Cases (CHAPTER XVI – LIABILITY TO PAY IN CERTAIN CASES)

(1) Where a taxable person is a firm or an association of persons or a Hindu Undivided Family and such firm, association or family has discontinued business–

(a) the tax, interest or penalty payable under this Act by such firm, association or family up to the date of such discontinuance may be determined as if no such discontinuance had taken place; and

(b) every person who, at the time of such discontinuance, was a partner of such firm, or a member of such association or family, shall, notwithstanding such discontinuance, jointly and severally, be liable for the payment of tax and interest determined and penalty imposed and payable by such firm, association or family, whether such tax and interest has been determined or penalty imposed prior to or after such discontinuance and subject as aforesaid, the provisions of this Act shall, so far as may be, apply as if every such person or partner or member were himself a taxable person.

(2) Where a change has occurred in the constitution of a firm or an association of persons, the partners of the firm or members of association, as it existed before and as it exists after the reconstitution, shall, without prejudice to the provisions of section 90, jointly and severally, be liable to pay tax, interest or penalty due from such firm or association for any period before its reconstitution.

(3) The provisions of sub-section (1) shall, so far as may be, apply where the taxable person, being a firm or association of persons is dissolved or where the taxable person, being a Hindu Undivided Family, has effected partition with respect to the business carried on by it and accordingly references in that sub-section to discontinuance shall be construed as reference to dissolution or to partition.

Explanation: For the purposes of this Chapter–

(i) a “Limited Liability Partnership” formed and registered under the provisions of the Limited Liability Partnership Act, 2008 shall also be considered as a firm;

(ii) “court” means the District Court, High Court or Supreme Court.

Amendments History:

1. CBEC notifies 1st July 2017 as the Commencement date for Section 94 of the CGST Act 2017, vide Notification 9/2017 Central Tax.

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Govt. has notified the CGST Act, 2017 on 12th April, 2017, which has subsequently been amended through the CGST (Extension to J&K) Act 2017, Finance Act 2018, CGST Amendment Act 2018, Finance (No. 2) Act 2019, Finance Act 2020, Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance 2020. Further, CBEC/ CBIC has also issued various Notifications from time to time, relating to the commencement date of various Sections/ Provisions in the respective CGST/ Amendment Acts, wherever required.

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