Chapter XVI - Liability to pay in certain cases
Section 88
Section 88: Liability in case of company in liquidation
Section 88 requires a liquidator to notify the Commissioner and addresses provision for company GST dues and private-company director exposure.
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Need advice on Section 88?
This article is for general information. Refer to the Central Goods and Services Tax Act, 2017 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(1) When any company is being wound up whether under the orders of a court or Tribunal or otherwise, every person appointed as receiver of any assets of a company (hereafter in this section referred to as the “liquidator”), shall, within thirty days after his appointment, give intimation of his appointment to the Commissioner.
(2) The Commissioner shall, after making such inquiry or calling for such information as he may deem fit, notify the liquidator within three months from the date on which he receives intimation of the appointment of the liquidator, the amount which in the opinion of the Commissioner would be sufficient to provide for any tax, interest or penalty which is then, or is likely thereafter to become, payable by the company.
(3) When any private company is wound up and any tax, interest or penalty determined under this Act on the company for any period, whether before or in the course of or after its liquidation, cannot be recovered, then every person who was a director of such company at any time during the period for which the tax was due shall, jointly and severally, be liable for the payment of such tax, interest or penalty, unless he proves to the satisfaction of the Commissioner that such 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.
Introduction
Winding up requires early GST communication and a reserve for tax, interest and penalty that is or may become due.
Key takeaways
Liquidator notice
The appointed receiver or liquidator informs the Commissioner within thirty days of appointment.
Commissioner amount
Within three months of receiving notice, the Commissioner notifies the liquidator of the amount considered sufficient for current or likely GST dues.
Private-company directors
If company dues cannot be recovered on winding up, directors from the relevant tax period may be jointly and severally liable unless they prove the statutory no-gross-neglect/misfeasance/breach defence.
Liquidator notice
The appointed receiver or liquidator informs the Commissioner within thirty days of appointment.
Commissioner amount
Within three months of receiving notice, the Commissioner notifies the liquidator of the amount considered sufficient for current or likely GST dues.
Private-company directors
If company dues cannot be recovered on winding up, directors from the relevant tax period may be jointly and severally liable unless they prove the statutory no-gross-neglect/misfeasance/breach defence.
Practical checklist
Do
- Record appointment date and notify the Commissioner.
- Identify current and contingent GST liabilities.
- Keep directors’ period and conduct evidence.
Avoid
- Assume a private contract, merger date or restructuring automatically removes statutory GST liability.
Frequently asked questions
Are directors automatically liable on liquidation?
The section applies when private-company dues cannot be recovered and preserves a statutory defence concerning non-recovery.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026