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Section 94 – Liability in other cases under CGST Act 2017

Detail analysis of notified Rules and the provisions of Section 94 (Liability in other cases) 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 94 of Central Goods and Services Tax Act, 2017 (12 of 2017) provides for Liability in other cases under CGST Act 2017.

Recently, we have discussed in detail section 93 (i.e. Special provisions regarding liability to pay tax, interest or penalty in certain cases) of CGST Act 2017. Today, we learn the provisions of section 94 of the CGST Act 2017. Complete Details of CGST Section 94 – Liability in other cases. You may CLICK HERE to download list of all sections of CGST Act 2017 in PDF format.

Notes on Section 94 of CGST Act 2017

Section 94 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 94 of CGST Act 2017 read with Central GST Rules 2017.

Section 94(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.

Section 94(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.

Section 94(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.

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