Section 91 of the Central Goods and Services Tax Act, 2017 deals with the liability of guardians, trustees and agents who carry on a business on behalf of a minor or another incapacitated person. The provision ensures that the GST liability connected with such a business can be assessed and recovered from the person who is actually conducting the business on behalf of the minor or incapacitated person.
Under Section 91, where a business is carried on by a guardian, trustee or agent for the benefit of a minor or other incapacitated person, any tax, interest or penalty payable under the CGST Act is levied upon and recoverable from that guardian, trustee or agent. The liability is determined in the same manner and to the same extent as it would have been determined and recovered from the minor or incapacitated person if that person were a major or otherwise capable of conducting the business personally.
Section 91 is part of Chapter XVI of the CGST Act, which contains provisions dealing with liability to pay tax in special circumstances. It follows Section 90, which deals with the liability of partners of a firm, and comes before Section 92, which deals with businesses controlled by a Court of Wards, Administrator General, Official Trustee, receiver or manager.
What Is Section 91 of the CGST Act?
Section 91 is titled “Liability of guardians, trustees, etc.”
The provision applies when:
- a business is being carried on;
- tax, interest or penalty is payable in respect of that business;
- the business is carried on by a guardian, trustee or agent;
- the business is carried on on behalf of a minor or another incapacitated person; and
- the business is carried on for the benefit of that minor or incapacitated person.
In such a situation, the GST liability is imposed on and recovered from the guardian, trustee or agent in the same manner and to the same extent as it would have been from the minor or incapacitated person if that person were capable of conducting the business personally.
Why Was Section 91 Introduced?
A minor or an incapacitated person may not be legally or practically capable of personally conducting the affairs of a business.
However, the business may still continue and generate taxable supplies.
For example, a minor may inherit a business from a parent. The minor may own the business or have an interest in it, but a guardian may actually operate the business on the minor’s behalf.
Similarly, a person who is otherwise incapacitated may have a business that is managed by a legally authorised person.
GST law therefore needs a mechanism through which the tax obligations of the business can be administered and recovered even though the person for whose benefit the business is being conducted is unable to conduct it personally.
Section 91 addresses this situation by placing the relevant GST liability on the guardian, trustee or agent who is carrying on the business.
Who Is Covered by Section 91?
The provision specifically refers to three categories:
- Guardian
- Trustee
- Agent
These persons must be carrying on the business on behalf of and for the benefit of a minor or other incapacitated person.
The words “on behalf of” and “for the benefit of” are important because Section 91 is not a general provision that makes every guardian, trustee or agent personally responsible for GST.
The statutory conditions must exist.
Liability of a Guardian Under Section 91
A guardian may be responsible for managing the business of a minor.
Suppose a minor inherits a taxable business from a deceased parent. Since the minor cannot personally conduct the business, a guardian manages the business for the minor’s benefit.
If the business has GST liability, Section 91 provides that the relevant tax, interest or penalty can be levied upon and recovered from the guardian in the same manner and to the same extent as it would have been determined and recovered from the minor if the minor were a major and conducting the business himself.
This enables the GST administration to deal with the person actually managing the business.
Example
Suppose a minor, Rahul, inherits a trading business.
His guardian, Mr. A, manages the business on Rahul’s behalf.
The business makes taxable supplies and becomes liable to GST.
Under Section 91, the applicable GST tax, interest or penalty can be levied upon and recovered from Mr. A in the prescribed manner.
The fact that Rahul is a minor does not prevent the business from being subject to GST.
Liability of a Trustee Under Section 91
Section 91 also covers a trustee who carries on a business on behalf of and for the benefit of a minor or another incapacitated person.
For example, property or a business may be held under a trust for the benefit of a minor beneficiary, and the trustee may conduct the business.
If GST is payable in respect of that business, Section 91 provides the mechanism for levying and recovering the tax, interest or penalty from the trustee.
The trustee is therefore the person through whom the business is being operated for GST purposes in the circumstances covered by the provision.
Liability of an Agent Under Section 91
The third category expressly mentioned is an agent of a minor or other incapacitated person.
Where an agent conducts the business on behalf of and for the benefit of the minor or incapacitated person, Section 91 allows the applicable GST liability to be levied upon and recovered from that agent.
The term “agent” in Section 91 should be understood in the context of the statutory arrangement described in the provision. It does not mean that every person who performs an ordinary agency service automatically becomes liable under Section 91.
The business must be carried on on behalf of and for the benefit of the minor or incapacitated person.
What Types of GST Liability Are Covered?
Section 91 specifically covers three categories:
1. Tax
GST payable in respect of the business can be levied and recovered from the guardian, trustee or agent.
2. Interest
Where interest becomes payable under the CGST Act, the provision also covers that liability.
3. Penalty
Where a penalty is legally imposed under the CGST Act, Section 91 includes such penalty within its scope.
Therefore, Section 91 is not limited to the basic tax amount.
How Is the Liability Determined?
Section 91 uses an important comparison.
The tax, interest or penalty is to be:
- levied upon the guardian, trustee or agent;
- recovered from the guardian, trustee or agent;
- in the same manner; and
- to the same extent
as it would have been determined and recovered from the minor or other incapacitated person as if that person were a major or capacitated person and were conducting the business himself.
This means Section 91 does not create a separate tax rate or separate GST calculation merely because the business belongs to a minor or incapacitated person.
Instead, it provides a mechanism for applying the normal GST provisions through the person actually conducting the business.
“As If He Were a Major or Capacitated Person”
This phrase is central to understanding Section 91.
The provision essentially creates a legal assumption for determining GST liability.
The minor or incapacitated person is treated, for the purpose of determining and recovering the relevant GST liability, as though that person:
- were a major or otherwise capacitated person; and
- were conducting the business personally.
The guardian, trustee or agent then becomes the person from whom the tax, interest or penalty is levied and recovered under Section 91.
This avoids creating a separate GST system for businesses belonging to minors or incapacitated persons.
Example of a Minor Running an Inherited Business Through a Guardian
Consider the following example.
A minor inherits a wholesale business from a parent.
The business has:
- taxable sales;
- GST registration requirements;
- output tax liability; and
- regular business expenses.
The minor cannot personally manage the business.
A guardian operates the business for the minor’s benefit.
During a particular tax period, the business has a GST liability of ₹4 lakh.
The relevant GST provisions determine the liability of the business.
Under Section 91, the ₹4 lakh tax liability can be levied upon and recovered from the guardian in the same manner and to the same extent as it would have been from the minor if the minor were a major and conducting the business personally.
If applicable interest or penalty subsequently arises, Section 91 also covers those amounts.
Section 91 Does Not Change the Nature of the Business
Section 91 does not automatically convert the business into a different type of taxable activity.
The underlying business remains subject to the normal provisions of GST law.
For example, depending on the circumstances, the business may have obligations concerning:
- registration;
- tax invoices;
- returns;
- payment of tax;
- input tax credit;
- books and records;
- refunds;
- assessments; and
- other GST compliance requirements.
Section 91 primarily identifies the person from whom the liability is to be levied and recovered when the business is operated on behalf of a minor or incapacitated person.
The final part of Section 91 expressly states that all provisions of the CGST Act and the rules made thereunder apply accordingly.
Section 91 and GST Registration
The fact that a guardian, trustee or agent is conducting the business does not eliminate the applicable GST registration requirements.
The normal registration provisions continue to apply according to the nature and circumstances of the business.
The CGST registration rules also recognise situations in which a person who is mentally incapacitated may have documents or GST-related filings handled by a guardian or another competent person. For example, the registration rules provide that where an individual is mentally incapacitated from attending to his affairs, documents and returns may be signed by the guardian or another person competent to act on his behalf.
This illustrates the broader GST principle that legal or practical incapacity does not prevent the business from having GST compliance obligations.
Section 91 and Input Tax Credit
Section 91 does not create a separate set of input tax credit rules.
Where the business is eligible for input tax credit, the normal provisions of the CGST Act and Rules continue to apply.
For example, the business may need to satisfy the conditions relating to:
- possession of a valid tax invoice or prescribed document;
- receipt of goods or services;
- tax payment requirements;
- return filing;
- time limits for claiming ITC; and
- blocked credits.
The guardian, trustee or agent managing the business must therefore ensure that the normal GST requirements are followed.
Section 91 and GST Returns
Since Section 91 states that all provisions of the CGST Act and Rules apply accordingly, the business must comply with the applicable return requirements.
Depending on the registration and nature of the taxpayer, this may include the relevant returns or statements prescribed under GST law.
The person managing the business should ensure that:
- outward supplies are correctly reported;
- eligible ITC is properly claimed;
- tax liability is correctly calculated;
- tax is paid on time; and
- applicable returns are furnished within the prescribed time.
Section 91 does not provide a general exemption from GST return requirements merely because the owner or beneficiary is a minor or incapacitated person.
Section 91 and Interest
If GST is not paid within the applicable statutory period and interest becomes payable under the CGST Act, Section 91 allows that interest liability to be levied upon and recovered from the guardian, trustee or agent in the manner provided by the section.
Therefore, delayed compliance can result in a liability beyond the basic GST amount.
The person managing the business should therefore monitor tax payment dates and ensure that the business’s GST liabilities are discharged within the applicable statutory timelines.
Section 91 and Penalty
Section 91 expressly includes penalty.
This means that the special liability mechanism is not restricted to tax and interest.
Where a penalty becomes legally payable under the CGST Act in relation to the business, the relevant amount can also be dealt with under Section 91.
However, whether a particular penalty is actually imposed depends on the substantive penalty provision and the facts of the case. Section 91 itself does not independently create every type of GST penalty.
Does Section 91 Make the Guardian the Owner of the Business?
No.
Section 91 does not state that the guardian becomes the owner of the business.
The provision addresses the GST liability arising from a business that is being carried on by the guardian on behalf of and for the benefit of a minor or incapacitated person.
The ownership, beneficial interest and management rights may arise from other applicable laws or legal arrangements.
Section 91 specifically determines how the GST tax, interest and penalty associated with the business are to be levied and recovered.
👉 Read More → Section 92 – Liability of Court of Wards, etc.
Does Section 91 Apply to Every Trustee?
No.
The provision applies where the trustee is carrying on the relevant business under the circumstances specified in Section 91, namely on behalf of and for the benefit of a minor or other incapacitated person.
A trustee who performs unrelated functions or who does not fall within the statutory circumstances cannot automatically be treated as liable under Section 91 merely because the word “trustee” appears in the provision.
The factual relationship between the trustee, the business and the beneficiary is important.
Does Section 91 Apply to Every Agent?
Similarly, Section 91 should not be interpreted as making every agent personally liable for GST.
The agent must be carrying on the business on behalf of and for the benefit of the minor or other incapacitated person as described in the section.
Other provisions of the CGST Act may apply to different types of agency relationships.
For example, Section 86 separately deals with the liability of an agent and principal where an agent supplies or receives taxable goods on behalf of the principal.
Therefore, the exact nature of the agency relationship should be examined before determining which provision applies.
Section 91 vs Section 86
Section 91 and Section 86 both refer to an agent, but they operate in different circumstances.
Section 86
Section 86 deals with an agent and principal where the agent supplies or receives taxable goods on behalf of the principal.
The agent and principal are jointly and severally liable for the tax payable on those goods.
Section 91
Section 91 applies where a guardian, trustee or agent carries on a business on behalf of and for the benefit of a minor or other incapacitated person.
The tax, interest or penalty is levied upon and recovered from the guardian, trustee or agent in the same manner and to the same extent as it would be determined and recovered from the minor or incapacitated person if that person were capable of conducting the business himself.
| Point | Section 86 | Section 91 |
|---|---|---|
| Main subject | Agent and principal | Guardian, trustee or agent of minor/incapacitated person |
| Business relationship | Supply/receipt of taxable goods | Business conducted for minor/incapacitated person |
| Main liability | Tax on taxable goods | Tax, interest and penalty |
| Persons covered | Agent and principal | Guardian, trustee or agent |
| Minor/incapacitated person involved | Not required | Required by the provision |
Section 91 vs Section 90
Section 90 deals with partners of a firm.
Under Section 90, where a firm is liable for tax, interest or penalty, the firm and each partner are jointly and severally liable.
Section 91 is different because it deals with a business conducted by a guardian, trustee or agent for the benefit of a minor or other incapacitated person.
| Point | Section 90 | Section 91 |
|---|---|---|
| Business structure | Partnership firm | Business of minor/incapacitated person |
| Persons responsible | Firm and partners | Guardian, trustee or agent |
| Main liability | Tax, interest and penalty | Tax, interest and penalty |
| Special condition | Firm liable under CGST Act | Business carried on for minor/incapacitated person |
| Retirement rule | Specifically provided | Not provided |
Section 91 vs Section 92
Section 92 deals with a different situation.
It applies where the estate or a portion of the estate of a taxable person owning a business is under the control of:
- Court of Wards;
- Administrator General;
- Official Trustee;
- receiver; or
- manager appointed by or under an order of a court.
In such circumstances, the tax, interest or penalty is levied upon and recoverable from the relevant Court of Wards, Administrator General, Official Trustee, receiver or manager in the same manner and to the same extent as it would be determined and recovered from the taxable person.
Section 91 instead focuses on a guardian, trustee or agent carrying on business for a minor or other incapacitated person.
Section 91 vs Section 93
Section 93 contains special provisions dealing with several situations, including:
- death of a taxable person;
- partition of a Hindu Undivided Family or association of persons;
- dissolution of a firm; and
- termination of guardianship or a trust.
Section 93(4), in particular, deals with a taxable person who is a guardian of a ward or a trustee carrying on business under a trust for a beneficiary. Where the guardianship or trust is terminated, the ward or beneficiary can become liable for tax, interest or penalty due up to the time of termination, subject to the statutory conditions.
This is important because Section 91 deals with liability while the business is being carried on in the specified representative capacity, whereas Section 93 contains a separate rule for the consequences of termination of guardianship or trust.
Practical Example: Trustee Operating Business for a Minor
Suppose a trust holds a business for the benefit of a minor beneficiary.
The trustee manages the business and makes taxable supplies.
The business has GST liability for a particular tax period.
Under Section 91, the tax, interest or penalty can be levied upon and recovered from the trustee in the same manner and to the same extent as it would have been determined and recovered from the minor if the minor were a major and conducting the business personally.
The trustee therefore needs to ensure that the business complies with the applicable GST requirements.
If the trust arrangement later terminates, Section 93(4) may also need to be considered for liabilities due up to the time of termination.
Practical Example: Agent Acting for an Incapacitated Person
Suppose an individual who is legally incapacitated owns a taxable business.
An authorised agent conducts the business for that person’s benefit.
The business makes taxable supplies and GST becomes payable.
Under Section 91, the relevant tax, interest and penalty can be levied upon and recovered from the agent in the manner specified by the provision.
The agent therefore cannot assume that the owner’s incapacity eliminates the GST obligations of the business.
Important Compliance Requirements
A guardian, trustee or agent operating a business covered by Section 91 should pay particular attention to the following areas.
1. GST registration
Determine whether the business is required to obtain GST registration under the applicable provisions.
2. Correct invoicing
Ensure that tax invoices and other prescribed documents are issued correctly.
3. Proper accounting records
Maintain books, invoices, payment records, purchase documents and other GST-related records.
4. Timely return filing
File applicable GST returns within the prescribed time.
5. Accurate tax payment
Calculate and pay the correct GST liability.
6. Input tax credit
Claim ITC only where the statutory conditions are satisfied.
7. GST notices
Respond to notices, scrutiny communications, assessment proceedings and other communications within the applicable statutory timelines.
8. Preserve legal authority
The guardian, trustee or agent should maintain documents establishing the legal or contractual authority under which the business is being operated.
Such documents may be important when determining the relationship between the representative and the minor or incapacitated person.
Key Features of Section 91
| Particular | Details |
|---|---|
| Section | 91 |
| Title | Liability of guardians, trustees, etc. |
| Chapter | Chapter XVI – Liability to Pay in Certain Cases |
| Main persons covered | Guardian, trustee or agent |
| Beneficiary/person represented | Minor or other incapacitated person |
| Business condition | Business carried on on behalf of and for the benefit of such person |
| Amounts covered | Tax, interest and penalty |
| Recovery | From guardian, trustee or agent |
| Basis of determination | Same manner and extent as applicable to minor/incapacitated person |
| Legal assumption | Minor/incapacitated person treated as major/capacitated and conducting business himself |
| Other provisions | CGST Act and Rules apply accordingly |
Common Mistakes to Avoid Under Section 91
Assuming that a minor’s business is outside GST
The fact that the beneficiary or owner is a minor does not automatically remove the business from GST law.
👉 Read More → Section 90 – Liability of partners of firm to pay tax
Assuming the guardian is automatically the owner
Section 91 concerns liability and recovery. It does not by itself determine ownership of the business.
Ignoring interest and penalty
Section 91 expressly covers tax, interest and penalty.
Treating every trustee as liable
The trustee must fall within the circumstances specified in Section 91.
Treating every agent as liable
The agency relationship must satisfy the requirements of the provision.
Ignoring other GST provisions
Section 91 states that the provisions of the CGST Act and Rules apply accordingly. It is therefore not a standalone exemption or substitute for normal GST compliance.
Frequently Asked Questions About Section 91
Conclusion
Section 91 of the CGST Act provides a specific mechanism for dealing with GST liabilities where a business is carried on by a guardian, trustee or agent on behalf of and for the benefit of a minor or other incapacitated person.
The section covers tax, interest and penalty and provides that these amounts can be levied upon and recovered from the guardian, trustee or agent in the same manner and to the same extent as they would have been determined and recovered from the minor or incapacitated person if that person were a major or capacitated person and were conducting the business personally.
The provision does not create a separate GST regime for such businesses. Instead, it ensures that the normal GST law can operate even when the person for whose benefit the business is being conducted cannot personally manage it. Section 91 should also be read with related provisions such as Sections 86, 90, 92 and 93 because those sections address other special situations involving agents, partners, guardians, trustees, receivers and changes in legal status.
For practical compliance, the person managing such a business should ensure proper GST registration, invoicing, record keeping, return filing, tax payment and response to GST proceedings while maintaining documents establishing the authority under which the business is being conducted.
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