Section 86 of GST – Liability of agent and principal

Section 86 of GST – Liability of agent and principal. Everything you want to know about GST Section 86. In this section you may find all details for “Liability of agent and principal” as per GST Act 2017Detailed Analysis of GST Section 86 of GST Act 2017. We Provide Complete Details for All GST Section’s and In this article you may find all details for GST Section 86. Check Section Wise Analysis of GST Act 2017, Chapter Wise Analysis of GST All Sections. in this article you may find complete details regarding Section 86 of GST Act 2017 – Liability of agent and principal, gst all sections and definitionsNow Check more details from below…..

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Section 86 of GST – Liability of agent and principal

Where an agent supplies or receives any taxable goods on behalf of his principal, such agent and his principal shall, jointly and severally, be liable to pay the tax payable on such goods under this Act.

Analysis of this Section

Introduction – This section casts the liability on a principal, in addition to the liability of agent who effects the supply of taxable goods on behalf of principal or procures taxable goods on behalf of his principal.


Under the GST law, in cases where –

  • Taxable Goods are supplied by agent on behalf of principal; or
  • Taxable Goods are procured by agent on behalf of principal;

the agent is primarily liable for tax. However, by virtue of this provision, both agent and principal, will be jointly and severally made liable to pay for tax payable on such supplies.

It is important to note that transactions between a Principal and Agent involving ‘handling’ of goods is regarded as a supply inter se vide paragraph 3, schedule I. But, in this section, ‘joint and several’ liability is being fasten on person who are not covered by the said fiction regarding supply. This section is to provide a recourse to the Government against either of them and not necessarily only upon default by the principal obligor. Government is free to recover dues from either of them or both (upto the total dues only) without having to exhaust its remedies against the one who was principally liable (principal obligor) and then only proceed against the other.


Q1. Whether the principal is also liable for tax payable on the goods supplied by the Agent?

Ans. Yes, the principal will also be jointly and severally liable to pay tax on such supplies, along with the agent.

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