Section 90 of the CGST Act, 2017, deals with the tax liability of a firm and its partners. It places joint and several liability on all partners of a firm for any tax, interest, or penalty payable by the firm under GST. This means that the tax department can recover the entire amount from any one or all of the partners, regardless of any internal agreement among partners.

 Liability of Partners – Joint and Several

Text: “Notwithstanding any contract to the contrary and any other law for the time being in force…”

• This means no private agreement (such as a partnership deed) or any other law will override this liability.
• The GST law prevails in this matter.

“…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…”

• If a firm fails to pay GST dues (tax, interest, or penalty), then:
  • The firm itself is responsible.
  • All partners are individually and collectively responsible.
• The department can recover the full amount from any one partner or from all partners together.

🔁 This principle is called “Joint and Several Liability.”

Liability in Case of Retirement of a Partner

Proviso 1:
“Provided that where any partner retires from the firm, he or the firm shall intimate the date of retirement to the Commissioner…”

• If a partner retires, either the partner or the firm must:
  • Intimate in writing to the GST Commissioner.
  • Clearly mention the date of retirement.

📅Time Limit: Within 1 month from the date of retirement.

Liability for Dues Till Retirement

“…such partner shall be liable to pay tax, interest or penalty due up to the date of his retirement whether determined or not…”

• A retiring partner is liable for:
  • All GST dues till the date of retirement.
  • Even if the exact amount is not yet determined on that day.

💡 Example:
If a partner retires on 30th June and later a tax liability is determined for April to June, the retiring partner is still liable for it.

Failure to Intimate Retirement – Extended Liability

Proviso 2:
“If no such intimation is given within one month… the liability of such partner shall continue until the date on which such intimation is received by the Commissioner.”

• If no intimation of retirement is given within 1 month:
  • The retiring partner continues to be liable for all tax dues of the firm.
  • This extended liability continues until the date Commissioner actually receives the retirement notice.

💡 Example:

• Partner retires on 1st April but informs department on 1st July.
• Then, the partner is liable for dues of the firm up to 1st July, not just 1st April.