GST India Forum – Goods and Services Tax (GST) in India › Forums › Bare Law › Sec 90 – Liability of partners of firm to pay tax
- Adarsh MadrechaModeratorApril 13, 2017 at 11:55 PMPost count: 57Topics: 36
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Notwithstanding any contract to the contrary and any other law for the time being in force, where any firm is liable to pay any tax, interest or penalty under this Act, the firm and each of the partners of the firm shall, jointly and severally, be liable for such payment.
Provided that where any partner retires from the firm, he or the firm, shall intimate the date of retirement of the said partner to the Commissioner by a notice in that behalf in writing and such partner shall be liable to pay tax, interest or penalty due up to the date of his retirement whether determined or not, on that date.
Provided further that if no such intimation is given within one month from the date of retirement, the liability of such partner under the first proviso shall continue until the date on which such intimation is received by the Commissioner.Priya MadrechaModeratorMay 23, 2017 at 1:06 PMPost count: 280Topics: 4
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This section deals with the liability of a partner of a firm to pay any tax, interest or penalty, that was otherwise payable by the firm.
(i) Where a partnership firm is liable to pay any tax, interest or penalty, all the partners of such firm will be jointly and severally liable to pay such amounts.
(ii) If any of the partners retire, then such partner or the firm shall give intimate the Commissioner by a notice in writing of such retirement within one month from the date of retirement. In such cases, the retiring partner shall be liable to pay tax, interest and penalty, if any upto the date of his retirement (whether determined or not prior to retirement).
(iii) However, where no such intimation is given by the partner to the Commissioner within 1 month from retirement date, the liability of such retired partner will continue till the date on which the intimation is received by the Commissioner.
(iv) The provision will be equally applicable for LLPs.
Every partner who retires from a partnership firm should file an intimation to the jurisdictional Commissioner giving the details of his retirement – viz., the name of the firm, registration number of the firm and the date of his / her retirement.
If the firm is operating in more than one States, such intimation should be filed in all such States.
Q1. Whether the retiring partner is liable to pay tax?
Ans. Retiring partner shall be liable to pay tax, interest and penalty, if any upto the date of his retirement (whether determined or not prior to retirement).
Q2. What are the precautions to be taken by the retiring partner?
Ans. Retiring partner shall intimate the Commissioner by a notice in writing of his retirement within one month from the date of his Retirement.
Q3. Whether partner or firm is liable to intimate to the Commissioner regarding his retirement?
Ans. Either the retiring partner or the firm shall give intimate the Commissioner by a notice in writing of retirement of a partner.
Q4. What is the time limit for the firm or partner to give intimation of retirement of partner?
Ans. The time limit to intimate retirement is within one month from the date of retirement to ensure that the liability is not fastened post retirement date.
Q5. What are the consequences of non-intimation?
Ans. The liability of the retiring partner continues till the date of receipt of intimation by the Commissioner
1. Retiring partner should intimate the retirement to
(a) Department (b) Government
(d) All of the above
Ans. (c) Commissioner
2. Intimation to the Commissioner has to be given within………………..
(a) 1 month
(b) 60 days
(c) 90 days
(d) 45 days
Ans. 1 month
3. If the intimation is delayed to the Commissioner then the retiring partner is liable to pay tax dues till:
(a) the date of intimation to the Commissioner
(b) till the date of acceptance of intimation by the Department
(c) till the date of retirement
(d) till the date of show cause notice
Ans: The date of intimation to the Commissioner
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