Sec 89 Liability of directors of private company, CGST Act, 2017
The below post explains about Liability of directors of private company under section 89 of CGST Act,2017.
Section 89 of CGST Act, 2017 explains Liability of directors of private company as below: (The amendments if any will also be updated here soon).
The extract of Section 89 of CGST Act,2017 quoted below:
89 Liability of directors of private company
89. (1) Notwithstanding anything contained in the Companies Act, 2013, where any
tax, interest or penalty due from a private company in respect of any supply of goods or
services or both for any period cannot be recovered, then, every person who was a director
of the private company during such period shall, jointly and severally, be liable for the
payment of such tax, interest or penalty unless he proves that the non-recovery cannot be
attributed to any gross neglect, misfeasance or breach of duty on his part in relation to the
affairs of the company.
(2) Where a private company is converted into a public company and the tax, interest
or penalty in respect of any supply of goods or services or both for any period during which
such company was a private company cannot be recovered before such conversion, then,
nothing contained in sub-section (1) shall apply to any person who was a director of such
private company in relation to any tax, interest or penalty in respect of such supply of goods
or services or both of such private company:
Provided that nothing contained in this sub-section shall apply to any personal penalty
imposed on such director.
The above information clarifies about Liability of directors of private company under section 89 of CGST Act,2017.
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