Section Section 89 of CGST Act :- Liability of Directors of Private Limited Companies

Financial Year: 2017

Section 89 of CGST Act

Liability of directors of private company

 

(1) Notwithstanding anything contained in the Companies Act, 2013,    

where any tax, interest or penalty due from a private company

in respect of any supply of goods or services or both for any period

cannot be recovered, then,

every person who was a director of the private company during such period shall, jointly and severally,

be liable for the payment of such tax, interest or penalty

unless he proves that the non-recovery

cannot be attributed to any gross neglect, misfeasance or breach of duty on his part in relation to the affairs of the company.

 

(2) Where a private company is converted into a public company

and the tax, interest or penalty

in respect of any supply of goods or services or both for any period during which

such company was a private company cannot be recovered before such conversion,

then,

nothing contained in sub-section (1) shall apply to any person who was a director of such private company

in relation to any tax, interest or penalty in respect of such supply of goods or services or both of such private company:

 

Provided that nothing contained in this sub-section shall apply to any personal penalty imposed on such director.

 

Thanks

CA Rahul Gupta