206.            A transferred his business worth Rs. 20 Lacs on going concern basis to B on 1.02.2017. Who is liable to pay tax if the tax liability arising on the goods was Rs. 2 lacs (including interest and penalty) on the following dates. 

(i)       On 15.01.2017

(ii)  On 1.2.2017

(iii) On 15.2.2017

 Business is transferred from A to B. As per section 85 of CGST Act, Mr. A & B are Jointly & Severally Liable to pay Tax/ Interest/ Penalty due upto date of transfer i.e., till 1.2.2017 whether business is transferred by way of gift/ sale /lease/ hire & whether such tax/ interest/ penalty is determined before transfer but remained unpaid or determined after transfer.

(a)     Only A is liable to pay Tax liability of Rs. 2 lacs as it arises before date of transfer

(b)          Both A & B are Jointly & Severally Liable to pay Tax liability of Rs. 2 lacs

(c)          Only B is liable to pay tax liability of Rs. 2 lacs as it arises after date of transfer