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Where an agent supplies or receives any taxable goods on behalf of his principal, such agent and his principal shall, jointly and severally, be liable to pay the tax payable on such goods under this Act.
86.1 Introduction
This section casts the liability on a principal, in addition to the liability of agent who effects the supply of taxable goods on behalf of principal or procures taxable goods on behalf of his principal.
86.2 Analysis
Under the GST law, in cases where –
— Taxable Goods are supplied by agent on behalf of principal; or — Taxable Goods are procured by agent on behalf of principal;
the agent is primarily liable for tax. However, by virtue of this provision, both agent and principal, will be jointly and severally made liable for tax payable on such supplies.
86.3 FAQs
Q1. Whether the principal is also liable for tax payable on the goods supplied by the Agent?
Ans. Yes, the principal will also be jointly and severally liable to pay tax on such supplies, along with the agent.
86.4 MCQ:
Q1. Agent and Principal, both are liable to pay tax on supply or receipt of ……………
(a) Taxable Goods only
(b) Services only
(c) Goods along with service
(d) None of the above
Ans: (a) Taxable Goods only
Q2. Agent and Principal are liable to pay tax…………..
(a) Jointly
(b) Separately
(c) Both jointly and severally
(d) Jointly or Separately Ans: (c) Both jointly and severally
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