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CA Final · Indirect Tax Laws · Liability to Pay in Certain Cases

Nisha is the guardian of her minor nephew Arjun and carries on a taxable trading business on his behalf. The guardianship terminates when Arjun attains majority. GST dues for the period of guardianship were determined after the termination. Who is liable to pay the dues relating to the period up to termination?

Arjun, the ward, is liable for the dues up to the date the guardianship terminated. The Act makes the ward responsible whether the amount was determined before the termination or afterwards, so the later determination does not shift liability back to Nisha.

  1. ANisha alone, because she was the taxable person during the period
  2. BArjun, the ward, is liable for the dues up to the time of terminationCorrect
  3. CNeither, as dues cannot be determined after the guardianship ends
  4. DArjun, but only for dues determined before termination

Explanation

Where a guardian carrying on business for a ward is the taxable person and the guardianship terminates, the ward becomes liable for the tax, interest or penalty due up to the termination. This holds whether the amount was determined before termination or thereafter, so the option limiting it to pre-termination determination is wrong.

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