Section 88 brings the GST department into a winding up. The liquidator must tell the department of the appointment, and the department must say what it claims. For a private company, directors may have to pay dues that cannot be recovered from the company.
Key points
- Under section 88(1) of the CGST Act, 2017 a liquidator appointed in a winding up must intimate the Commissioner within thirty days.
- The Commissioner must notify the liquidator, within three months of the intimation, of the amount sufficient to provide for the company's dues (section 88(2)).
- When a private company is wound up and its dues cannot be recovered, every director at the relevant time is jointly and severally liable, unless he proves that non-recovery is not due to his gross neglect, misfeasance or breach of duty (section 88(3)).
The provisions
88(1)–(3)Liability in case of company in liquidation
Statutory text
(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.
*Enforced w.e.f. 1st July, 2017.
Statutory text as published on the CBIC tax information portal, as on 03.10.2026; the numbered notes record each amendment. Official source
Common questions
- Are directors liable for GST dues of a company in liquidation?
- For a private company, yes — under section 88(3) of the CGST Act directors are jointly and severally liable for dues that cannot be recovered, unless they prove the non-recovery is not due to their gross neglect, misfeasance or breach of duty.
Commentary and case notes checked against the judgments and CBIC sources on 04.10.2026.
What it means
Where the company is in corporate insolvency resolution or liquidation under the Insolvency and Bankruptcy Code, 2016, the Code governs the treatment of government dues, and claims must be filed with the resolution professional or liquidator; dues not included in an approved resolution plan are extinguished (Ghanashyam Mishra and Sons v Edelweiss ARC, Supreme Court, 2021).