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Section 87 of the CGST Act, 2017

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GST›CGST Act, 2017›Chapter XVI, Liability to Pay in Certain Cases

At a glance

Entitlement and conditions

87(2)Notwithstanding the merger or amalgamation order, treat the companies as distinct up to its date and cancel their registration certificates with effect from that date.

Bars, duties and time limits

87(1)Include supplies and receipts between the companies from the retrospective effective date to the order date in their respective turnover, with tax consequences accordingly.

Procedure, powers and definitions

87The law does not settle the meaning or measurement of turnover of supply or receipt, or who initiates and orders the required registration cancellation.

Companies merging or amalgamating under an order with an earlier effective date must include their intervening supplies to each other in their respective turnover. Despite anything in that order, the Act treats them as distinct companies until the order date. Their registration certificates are to be cancelled from that date, although this section does not set out the cancellation machinery.^[1]

Quick facts

Section 87, CGST Act, 2017

Liability in case of amalgamation or merger of companies

Provision
Act	Central Goods and Services Tax Act, 2017
Chapter	XVI, Liability to Pay in Certain Cases
Section title	Liability in case of amalgamation or merger of companies
In force from	1 July 2017^[1]
Amendments
Last amendment	1 July 2017: brought section 87 into force (none — the source's own enforcement note, not an amendment footnote)
Amendments	1 footnote in the CBIC text (table)
Related provisions
Rules	Rule 22, Rule 41 of the CGST Rules, 2017
Sections	18, 22, 29, 85
Structure 87(1) opening wordsThe amalgamation or merger and its order 87(1) middle limbSupplies and receipts between the companies in the intervening period 87(1) closing limbInclusion in turnover and the tax payable accordingly 87(2) first limbTreated as distinct companies up to the date of the order 87(2) closing limbCancellation of the registration certificates
Source
Law text	CBIC tax information portal, served on 17 September 2026^[1]
Questions reviewed	Prashant Prakash, 22 September 2026

Text

The text below is the section as served by the CBIC tax information portal on 17 September 2026, with the portal's own amendment footnote markers (shown as small numerals before a bracket) and its footnotes.^[1] The Act as published in the Gazette of India is the legal source.

Section 87, verbatim (show)

*

Section 87. Liability in case of amalgamation or merger of companies.-

(1) When two or more companies are amalgamated or merged in pursuance of an order of court or of Tribunal or otherwise and the order is to take effect from a date earlier to the date of the order and any two or more of such companies have supplied or received any goods or services or both to or from each other during the period commencing on the date from which the order takes effect till the date of the order, then such transactions of supply and receipt shall be included in the turnover of supply or receipt of the respective companies and they shall be liable to pay tax accordingly.

(2)

Notwithstanding anything contained in the said order, for the purposes of this Act, the said two or more companies shall be treated as distinct companies for the period up to the date of the said order and the registration certificates of the said companies shall be cancelled with effect from the date of the said order.

*Enforced w.e.f. 1st July, 2017.

Questions to answer on the file

Questions a reviewer answers from the engagement file, grouped by the part of the section they come from. They describe what the section asks; they do not decide it.

Scope the section as a whole

Questions to answer on the file2 questions

What is the matter, from the things this section speaks about?
Is the date of the said order on or after 1 July 2017?

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The amalgamation or merger and its order 87(1) opening words

Questions to answer on the file5 questions

Have two or more companies been amalgamated or merged?
In pursuance of what were the companies amalgamated or merged: an order of court, an order of Tribunal or otherwise?
What is the date of the order?
Is the order to take effect from a date earlier to the date of the order?
What is the date from which the order takes effect?

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Supplies and receipts between the companies in the intervening period 87(1) middle limb

Questions to answer on the file5 questions

Did any two or more of those companies supply or receive goods or services or both to or from each other?
What passed between the companies in the transaction: goods, services or both?
On what date was that supply or receipt between the companies made?
Does that date fall in the period commencing on the date from which the order takes effect till the date of the order?
What is the value of that supply or receipt between the companies?

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Inclusion in turnover and the tax payable accordingly 87(1) closing limb

Questions to answer on the file4 questions

In which capacity does the company stand in the transaction: as the company that supplied or as the company that received?
Have those transactions been included in the turnover of supply or receipt of the respective companies?
What is the "turnover of supply or receipt" in which the transactions are to be included: the aggregate turnover defined in clause (6) of section 2, the turnover in State or turnover in Union territory defined in clause (112) of section 2 or a turnover of supply or receipt that this Act nowhere defines?
Has tax been paid on those transactions of supply and receipt?

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Treated as distinct companies up to the date of the order 87(2) first limb

Questions to answer on the file2 questions

Which tax period is?
Does the order provide that the companies are to be treated as one from the date it takes effect?

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Cancellation of the registration certificates 87(2) closing limb

Questions to answer on the file4 questions

Does the company hold a certificate of registration under this Act?
Has that certificate of registration been cancelled?
From which date does that cancellation take effect?
On what footing is the cancellation effected: an order of the proper officer under section 29 or sub-section (2) of section 87 operating of its own force?

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Amendment history

The CBIC text carries 1 footnote. The table gives each in the source's own terms. Effective dates are as the footnotes state them.^[1]

Amendments to section 87 as footnoted in the CBIC text
Note	Change	Instrument	Effective from
	brought section 87 into force	none — the source's own enforcement note, not an amendment footnote	1 July 2017

Provisions connected to Section 87
Provision	Connection	Words that tie them
Section 29	87(2) requires Section 29	87(2) "the registration certificates of the said companies shall be cancelled with effect from the date of the said order"; section 29 is the Act's provision for cancellation of registration
Rule 22 of the CGST Rules, 2017	87(2) prescribed by Rule 22 of the CGST Rules, 2017	87(2) "shall be cancelled"; rule 22 lays down the procedure by which a cancellation of registration is carried out
Section 22	Section 22 sub-section (4) same as this provision	22(4) speaks of a transfer pursuant to a scheme of amalgamation or demerger "pursuant to an order of a High Court, Tribunal or otherwise", the same class of order as 87(1)
Section 18	Section 18 sub-section (3) same as this provision	18(3) "Where there is a change in the constitution of a registered person on account of sale, merger, demerger, amalgamation, lease or transfer of the business"
Section 85	Section 85 same as this provision	both sit in the chapter on liability to pay in certain cases and carry a liability across a change in the person carrying on the business

Circulars and notifications

No circular or notification in the CBIC repository is recorded as citing this section.

Unsettled questions

The words of section 87 do not answer these questions. Where one decides a matter on the file, the answer depends on the position taken on it.

Sub-section (1) requires the transactions to be included in "the turnover of supply or receipt of the respective companies". The Act defines "aggregate turnover" in clause (6) of section 2 and "turnover in State or turnover in Union territory" in clause (112) of section 2, but nowhere defines "turnover of supply or receipt", and it does not say which of the two, if either, the sub-section means, or how a turnover of receipt is measured at all.
Sub-section (2) says that the registration certificates "shall be cancelled with effect from the date of the said order". It names no officer, requires no application and provides for no order of cancellation. Does the cancellation operate of its own force from the date of the order, or does it still require an order of the proper officer under section 29, and what is the position for returns and liabilities for the interval between the date of the order and the date any such order is passed?

See also

Section 29 of the CGST Act, 2017: cancellation or suspension of registration
Rule 22 of the CGST Rules, 2017: cancellation of registration
Section 85 of the CGST Act, 2017: liability in case of transfer of business

References

Central Board of Indirect Taxes and Customs. "Section 87. Liability in case of amalgamation or merger of companies". Central Goods and Services Tax Act, 2017, CBIC tax information portal, with amendment footnotes 1 to 1. Retrieved 17 September 2026.

External links

CGST Act, 2017, Section 87 on the CBIC tax information portal