Director liability for unrecoverable GST: directors of private companies jointly and severally responsible unless no gross neglect. Directors of private companies are jointly and severally liable for tax, interest or penalty due on supplies of goods or services that cannot be recovered from the company, unless a director proves the non-recovery was not due to gross neglect, misfeasance or breach of duty. Upon conversion of a private company into a public company, that director liability does not apply for unrecovered amounts attributable to the private-company period, but any personal penalty on a director remains unaffected.
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.
Director liability for unrecoverable GST: directors of private companies jointly and severally responsible unless no gross neglect.
Directors of private companies are jointly and severally liable for tax, interest or penalty due on supplies of goods or services that cannot be recovered from the company, unless a director proves the non-recovery was not due to gross neglect, misfeasance or breach of duty. Upon conversion of a private company into a public company, that director liability does not apply for unrecovered amounts attributable to the private-company period, but any personal penalty on a director remains unaffected.
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