GST Liability After Death: Understanding Section 93 of the CGST Act, 2017 and Its Impact on Legal Representatives
Introduction: Does Death Extinguish GST Liability?
A fundamental question that arises when a sole proprietor or any taxable person dies is whether their outstanding GST obligations — comprising tax, interest, or penalty — simply cease to exist. The answer under the Central Goods and Services Tax Act, 2017 ("CGST Act") is a clear no. Death alone does not wipe out tax liability. However, the manner in which such liability is determined and enforced after the death of the assessee is far from straightforward.
Section 93 of the CGST Act provides a dedicated statutory framework governing exactly this situation. It draws a critical distinction between two post-death scenarios — one where the deceased's business continues under another person, and another where it is wound down entirely. The legal consequences for the legal representative differ significantly depending on which scenario applies, and a growing body of judicial decisions has added important procedural dimensions to this already nuanced provision.
This article examines the text of Section 93, its interaction with Section 75 of the CGST Act, and the principles that have emerged from recent decisions of various High Courts and the Goods and Services Tax Appellate Tribunal ("GSTAT").
The Statutory Framework: What Section 93 Actually Says
Section 93(1) of the CGST Act reads as follows:
93. Special provisions regarding liability to pay tax, interest or penalty in certain cases.
(1) Save as otherwise provided in the Insolvency and Bankruptcy Code, 2016 (31 of 2016), where a person, liable to pay tax, interest or penalty under this Act, dies, then––
(a) if a business carried on by the person is continued after his death by his legal representative or any other person, such legal representative or other person, shall be liable to pay tax, interest or penalty due from such person under this Act; and
(b) if the business carried on by the person is discontinued, whether before or after his death, his legal representative shall be liable to pay, out of the estate of the deceased, to the extent to which the estate is capable of meeting the charge, the tax, interest or penalty due from such person under this Act, whether such tax, interest or penalty has been determined before his death but has remained unpaid or is determined after his death.
Two distinct streams of liability flow from this provision:
Section 93(1)(a)— Where the business is continued by a legal representative or any other person after the assessee's death, such person becomes directly liable for the outstanding tax dues.Section 93(1)(b)— Where the business is discontinued (whether before or after death), the legal representative's liability is restricted to the estate left behind by the deceased, and only to the extent that such estate is capable of bearing the charge.
Crucially, the provision also clarifies that liability is not erased simply because the determination of tax, interest, or penalty occurs after the date of death. The obligation survives — but so does the need to follow the correct procedure in enforcing it.
The Distinction Between Survival of Liability and Validity of Proceedings
One of the most important clarifications emerging from recent case law is that the survival of tax liability does not automatically validate proceedings that were conducted in the name of a dead person. These are two separate legal questions and must be treated as such.
The GSTAT, Thiruvananthapuram Bench, addressed this distinction directly in Vijayan Sahadevan (Deceased) v. Commissioner of Kerala State GST, Thiruvananthapuram, 2026 (8) TMI 1362 – GSTAT Thiruvananthapuram. In that matter, the sole proprietor had passed away, the GST registration had been cancelled, no returns were being filed, and no business activity was being carried on. The question was whether proceedings could still be maintained against the legal heir.
The Tribunal affirmed that post-death recovery is legally permissible but held that where the business has been discontinued, Section 93(1)(b) governs, and recovery from the legal representative is confined to the estate of the deceased and only to the extent that the estate can absorb the liability. Furthermore, the Tribunal found that the Department had not issued any notice to the legal heir, had conducted no inquiry into the estate, and had taken none of the steps mandated under Section 93. The impugned order was accordingly set aside.
The takeaway from this decision is significant: Section 93 is not merely a recovery mechanism. It establishes a procedural pathway that must be consciously followed before liability can be fastened on a legal representative.