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Section 87 – Liability in case of amalgamation or merger of companies under CGST Act 2017

Detail analysis of notified Rules and the provisions of Section 87 (Liability in case of amalgamation or merger of companies) of the Central Goods and Services Tax (CGST) Act, 2017.

Chapter XVI (Sections 85-94) of the Central Goods and Services Tax (CGST) Act, 2017 deals with provisions related to Liability to Pay in Certain Cases. Section 87 of Central Goods and Services Tax Act, 2017 (12 of 2017) provides for Liability in case of amalgamation or merger of companies under CGST Act 2017.

Recently, we have discussed in detail section 86 (i.e. Liability of agent and principal) of CGST Act 2017. Today, we learn the provisions of section 87 of the CGST Act 2017. Complete Details of CGST Section 87 – Liability in case of amalgamation or merger of companies. You may CLICK HERE to download list of all sections of CGST Act 2017 in PDF format.

Notes on Section 87 of CGST Act 2017

Section 87 of CGST Act 2017 shall come into force on 01.07.2017 vide Notification No. 9/2017 – Central Tax, G.S.R. 658(E), dated 28.06.2017. In this note, you will learn detail of the provisions of section 87 of CGST Act 2017 read with Central GST Rules 2017.

Section 87(1):

When two or more companies are amalgamated or merged in pursuance of an order of court or of Tribunal or otherwise and the order is to take effect from a date earlier to the date of the order and any two or more of such companies have supplied or received any goods or services or both 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 they shall be liable to pay tax accordingly.

Section 87(2):

Notwithstanding anything contained in the said order, for the purposes of this Act, the said two or more companies shall be treated as distinct companies for the period up to the date of the said order and the registration certificates of the said companies shall be cancelled with effect from the date of the said order.

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