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

Ramesh was a guardian running a business for his ward Ishaan, a minor, and was registered under GST as the taxable person. The guardianship ended when Ishaan became a major on 1 January. In March, an order determined tax and interest for periods up to 31 December. Who is liable for these dues under the CGST Act?

Ishaan, the ward, is liable. When guardianship terminates, the ward becomes liable for the tax, interest or penalty due from the guardian-taxable person up to the time of termination, whether it was determined before termination or afterwards.

  1. ARamesh alone, because he was the registered taxable person
  2. BIshaan, the ward, is liable for dues up to the time guardianship terminated, even though determined laterCorrect
  3. CNeither, since the minor cannot be a taxable person
  4. DThe dues must be written off after termination of guardianship

Explanation

Where the taxable person is a guardian carrying on business for a ward, and the guardianship terminates, the ward is liable for tax, interest or penalty due up to termination. This applies even if determined after termination. Hence Ramesh-only liability is incorrect.

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