Question 16 - If a person liable to pay tax has certain tax liability and in the meantime he transfers his business to another person, what happens to the existing tax liability?
FAQ on GST dated 21.9.2016 based on Draft Model GST Chapter 15 Demands and Recovery
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Transfer of business: transferor and transferee are jointly and severally liable for tax, interest or penalty due up to transfer. Both transferor and transferee are jointly and severally liable for tax, interest and penalty due up to the time of transfer, covering amounts determined before or after transfer and irrespective of the mode of transfer such as sale, gift, lease, leave-and-license or hire.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Transfer of business: transferor and transferee are jointly and severally liable for tax, interest or penalty due up to transfer.
Both transferor and transferee are jointly and severally liable for tax, interest and penalty due up to the time of transfer, covering amounts determined before or after transfer and irrespective of the mode of transfer such as sale, gift, lease, leave-and-license or hire.
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