Section 90 of CGST Act - Liability of Partners of Firm to Pay Tax
Section 90 of the Central Goods and Services Tax Act, 2017 deals with the GST liability of a partnership firm and its partners. It makes the firm and every partner jointly and severally liable for tax, interest or penalty payable by the firm, subject to the special rule for a retiring partner.
Text and effect of Section 90
Section 90 - Liability of partners of firm to pay tax.
Notwithstanding any contract to the contrary and any other law for the time being in force, where a firm is liable to pay tax, interest or penalty under the CGST Act, the firm and each partner are jointly and severally liable for that payment.
Where a partner retires, the partner or the firm must intimate the date of retirement to the Commissioner in writing. The retiring partner remains liable for tax, interest or penalty due up to the date of retirement, whether the amount was determined before that date or is determined later.
If the retirement is not intimated within one month from the date of retirement, the retiring partner's liability continues until the date on which the Commissioner receives the intimation.
Meaning of joint and several liability
"Joint and several liability" means that the statutory liability is not confined to the partnership firm alone. Subject to the Act, the amount payable by the firm may also be recovered from its partners. A private agreement among partners allocating GST responsibility differently does not override Section 90 because the section expressly operates notwithstanding a contract to the contrary.
Liability of a retiring partner
A partner who retires does not automatically escape GST liabilities relating to the period during which the person was a partner. Section 90 specifically preserves liability for tax, interest and penalty due up to the retirement date, even where the liability is quantified or determined later.
One-month intimation requirement
The retirement should be intimated in writing to the Commissioner within one month. If the statutory intimation is not given within that period, Section 90 provides that the retiring partner's liability continues until the Commissioner actually receives the intimation.
Practical implications for firms and partners
- Maintain documentary proof of the effective date of admission or retirement of every partner.
- Promptly update GST registration particulars when the constitution of the firm changes.
- Ensure that the statutory retirement intimation contemplated by Section 90 is made within one month.
- Keep acknowledgement and supporting documents proving when the intimation was submitted or received.
- Before retirement or reconstitution, review outstanding returns, demands, interest, penalties and pending GST proceedings.
Section 90 and change in constitution of a firm
Section 90 should also be read with Section 94 of the CGST Act. Section 94 contains additional rules for discontinuance, dissolution and changes in the constitution of a firm or association of persons. In particular, a reconstitution does not by itself extinguish statutory liabilities relating to an earlier period.
Related CGST provisions
| Provision | Subject |
|---|---|
| Section 89 | Liability of directors of a private company |
| Section 90 | Liability of partners of a firm to pay tax |
| Section 91 | Liability of guardians, trustees, etc. |
| Section 93 | Special provisions regarding liability in certain cases |
| Section 94 | Liability in other cases, including reconstitution and dissolution |
Official GST resources
For the authoritative statute and current GST material, refer to the official Government resources linked in the sidebar. Users should verify amendments, notifications, circulars and rules applicable to the relevant tax period before acting on a GST matter.