Section 90: Partners, Retirement and the One-Month Notice

Section 90 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.

Retiring from a firm does not end a partner's GST exposure. Telling the Commissioner does — and there is a one-month window in which to do it.

Section 90: notwithstanding any contract to the contrary and any other law in force, where a firm is liable to pay any tax, interest or penalty, the firm and each of the partners shall be jointly and severally liable. First proviso: where a partner retires, he or the firm shall intimate the date of retirement to the Commissioner by a notice in writing, and that partner shall be liable for tax, interest or penalty due up to the date of his retirement, whether determined or not on that date. Second proviso: if no such intimation is given within one month from the date of retirement, the partner's liability continues until the date the intimation is received by the Commissioner. Explanation (i) to Chapter XVI: an LLP registered under the Limited Liability Partnership Act, 2008 is also considered a firm.

The override

"Notwithstanding any contract to the contrary and any other law for the time being in force."

Two things are displaced:

The partnership deed. A clause allocating tax liability among partners, or indemnifying a retiring partner, binds the partners between themselves. It does not affect the department, which may proceed against any partner for the whole.

Other law. Including the limitations on a retired partner's liability under the Indian Partnership Act, 1932, and — crucially — the limited liability of a partner in an LLP.

That second point is the one most often missed, and it follows from the Explanation.

LLPs are firms for this Chapter

Explanation (i) to Chapter XVI: "a 'Limited Liability Partnership' formed and registered under the provisions of the Limited Liability Partnership Act, 2008 shall also be considered as a firm."

So s.90 applies to an LLP, and its partners are jointly and severally liable for the LLP's tax, interest and penalty — notwithstanding any other law, which includes s.28 of the LLP Act limiting a partner's liability.

For a professional or investment LLP, that is a material exposure and it is frequently assumed away. The protection is not the LLP structure; it is compliance, and — on exit — the retirement notice.

The retirement notice: how the two provisos work together

First proviso — what the retiring partner is liable for. Tax, interest or penalty due up to the date of his retirement, whether determined or not on that date.

So retirement does not cut off liability for the period the partner was in the firm, and a demand raised three years later for a period before retirement still reaches him. That much is unavoidable.

Second proviso — what happens if you do not tell. Where no intimation is given within one month of retirement, the partner's liability under the first proviso continues until the date the intimation is received by the Commissioner.

So the notice does not erase past liability. It stops the clock on future liability.

Worked example. A partner retires on 30 June 2026.

• Notice given by 31 July 2026 — the partner is liable for dues up to 30 June 2026, and nothing after.
• No notice until 15 April 2028 — the partner remains liable for the firm's dues all the way to 15 April 2028, nearly two additional years of a firm he left.

That is the whole significance of the one month.

The mechanics of the notice

Who may give it: "he or the firm". Either. Which means the retiring partner does not depend on the firm's cooperation — and should not rely on it, since a firm in difficulty has little incentive to file it.

Form: a notice in writing to the Commissioner. No form is prescribed, so a letter is what the section contemplates.

What it should contain:

• the firm's or LLP's name and GSTIN, for every registration held;
• the partner's name, PAN and DIN or DPIN;
• the date of retirement, stated clearly;
• a reference to s.90 and the first proviso;
• supporting documents — the retirement deed or supplementary deed, the Form 4 filed with the Registrar for an LLP, the reconstituted deed.

Where to send it: the Commissioner of every jurisdiction in which the firm holds a registration. A notice to one State does not cover the others.

Keep proof of receipt. The second proviso operates on the date the intimation is received, so an acknowledgement, a dated inward stamp or a portal reference is what fixes the date.

The related steps on retirement

Amend the registration. A change in partners is a change in the particulars of registration, requiring an application under Rule 19 within the prescribed time. Rule 19 →

Consider whether the constitution has changed for registration purposes. Where a reconstitution results in a new PAN, a fresh registration is required and the old one cancelled, with credit moved under s.18(3) / ITC-02. Where the PAN is unchanged, an amendment suffices. Change in constitution →

Take an indemnity from the continuing partners. It does not bind the department, but it gives the retiring partner a contractual claim if the department proceeds against him.

Get a compliance snapshot at the retirement date — returns filed, liability register, open notices. It is the evidence of what was outstanding when the partner left, and it is far easier to obtain on the way out than afterwards.

Section 94: discontinuance and reconstitution

Section 94(1): where a firm, association of persons or HUF has discontinued business, the tax, interest or penalty up to the date of discontinuance may be determined as if no discontinuance had taken place, and every person who was a partner or member at the time of discontinuance is jointly and severally liable, whether determined before or after it — and the Act applies as if every such person were himself a taxable person.

Section 94(2): where a change occurs in the constitution of a firm or association, the partners or members as it existed before and as it exists after the reconstitution are jointly and severally liable for dues of any period before the reconstitution, without prejudice to s.90.

Section 94(3): sub-section (1) applies equally to dissolution of a firm or association and to partition of an HUF.

So an incoming partner takes on liability for periods before joining, which is the mirror of the retiring partner's problem — and the reason incoming partners should insist on their own compliance diligence and indemnity.

Key takeaways

• Section 90 makes the firm and each partner jointly and severally liable, overriding any contract and any other law.
• An LLP is a firm for this Chapter, so partner limited liability does not apply to GST dues.
• A retiring partner remains liable for dues up to the retirement date, determined or not.
• Failing to intimate within one month extends liability until the intimation is received.
• Either the partner or the firm may give the notice — the partner should not rely on the firm.
• Section 94(2) makes incoming partners liable for periods before the reconstitution.

Read next

• Section 93: Death, Partition and Dissolution
• Sections 88 and 89: Liquidation and Director Liability
• Section 85: Buying a Business and Inheriting Its GST
• Change in Constitution and Fresh Registration Under GST

Disclaimer: Positions stated as on 5 September 2026, based on the CGST Act as amended to 31 March 2026 (ICAI Bare Law, 12th edition).