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 89, verbatim (show)
*
Section
89.
Liability of directors of private company.-
(1) Notwithstanding anything contained in the Companies Act, 2013 (18 of 2013), where any tax, interest or penalty due from a private company in respect of any supply of goods or services or both for any period cannot be recovered, then, every person who was a director of the private company during such period shall, jointly and severally, be liable for the payment of such tax, interest or penalty unless he proves that the 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.
(2)
Where a private company is converted into a public company and the tax, interest or penalty in respect of any supply of goods or services or both for any period during which such company was a private company cannot be recovered before such conversion, then, nothing contained in sub-section (1) shall apply to any person who was a director of such private company in relation to any tax, interest or penalty in respect of such supply of goods or services or both of such private company:
Provided
that nothing contained in this sub-section shall apply to any personal penalty imposed on such director.
*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
The private company and the amount due from it 89(1) opening words
Questions to answer on the file6 questions
Non-recovery from the company 89(1) "cannot be recovered"
Questions to answer on the file3 questions
The person who was a director during the period 89(1) middle limb
Questions to answer on the file2 questions
The director's proof 89(1) closing words
Questions to answer on the file3 questions
Conversion of the private company into a public company 89(2)
Questions to answer on the file5 questions
Personal penalty imposed on the director the proviso to 89(2)
Questions to answer on the file2 questions
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]
| Note | Change | Instrument | Effective from |
|---|---|---|---|
| brought section 89 into force | none — the source's own enforcement note, not an amendment footnote | 1 July 2017 |
Relationship with other provisions
| Provision | Connection | Words that tie them |
|---|---|---|
| Section 79 | this provision requires Section 79 | 89(1) "cannot be recovered" presupposes the modes of recovery that section 79 provides |
| Section 88 | Section 88 sub-section (3) same as 89(1) | 88(3) fastens the same liability on directors of a private company that is wound up, and requires the proof to be made "to the satisfaction of the Commissioner", which 89(1) does not |
Circulars and notifications
No circular or notification in the CBIC repository is recorded as citing this section.
Unsettled questions
The words of section 89 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) fastens the liability only where the amount due from the private company "cannot be recovered". The Act fixes no test for that state: it does not say what steps of recovery under section 79 must first have been taken and exhausted, whether an order or a written finding of non-recovery is needed, or how long a failure to recover must have lasted. Added by the section 88 record and cited here.
- Sub-section (1) speaks of "a private company" and names the Companies Act, 2013 (18 of 2013) only in a non-obstante clause. This Act defines neither "company" nor "private company". Is "private company" to be read as that Act defines it, and what is the position for a body corporate incorporated outside India or for a company that was a private company for part only of the period? Added by the section 88 record and cited here.
- Sub-section (2) relieves the former director where the amount "cannot be recovered before such conversion". It does not say whether those words fix the time at which the failure of recovery must have been established — so that a non-recovery established only after the conversion leaves sub-section (1) in force — or whether they merely describe an amount outstanding at the conversion. Nor does it say what becomes of the amount once sub-section (1) ceases to apply.
See also
- Section 79 of the CGST Act, 2017: recovery of tax
- Section 88 of the CGST Act, 2017: liability in case of company in liquidation
References
- Central Board of Indirect Taxes and Customs. "Section 89. Liability of directors of private company". 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 89 on the CBIC tax information portal