Section 88 of CGST Act

Liability in case of company in liquidation

• Enforced w.e.f. 1-7-2017.

Section 88 (1)

When any company is being wound up

whether under the orders of a court or Tribunal or otherwise,

every person appointed as receiver of any assets of a company

(hereafter in this section referred to as the “liquidator”),

shall, within thirty days after his appointment,

give intimation of his appointment to the Commissioner.

Section 88 (2)

The Commissioner shall,

after making such inquiry or calling for such information as he may deem fit,
notify the liquidator within three months from the date on which he receives intimation of the appointment of the liquidator,

the amount which in the opinion of the Commissioner would be sufficient to provide for any tax, interest or penalty which is then, or

is likely thereafter to become, payable by the company.

Section 88 (3)

When any private company is wound up and any tax, interest or penalty determined under this Act on the company for any period,

whether before or in the course of or after its liquidation,

cannot be recovered, then every person who was a director of such company at any time during the period for which the tax was due shall,

jointly and severally,

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

unless he proves to the satisfaction of the Commissioner that such 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.

• See also –
• Rule 160 of the CGST Rules, 2017; and
• Form No. GST DRC- 24 of the CGST Rules, 2017.