Chapter XVI - Liability to pay in certain cases
Section 86
Section 86: Liability of agent and principal
Section 86 makes an agent and principal jointly and severally liable for GST on taxable goods supplied or received by the agent for the principal.
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Need advice on Section 86?
This article is for general information. Refer to the Central Goods and Services Tax Act, 2017 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
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.
Introduction
The provision is directed to an agency relationship involving taxable goods.
Key takeaways
Agency activity
The agent supplies or receives taxable goods on behalf of the principal.
Joint liability
Agent and principal are jointly and severally liable for tax payable on those goods.
Scope check
The section expressly speaks of taxable goods; classify the arrangement and transactions before applying it.
Agency activity
The agent supplies or receives taxable goods on behalf of the principal.
Joint liability
Agent and principal are jointly and severally liable for tax payable on those goods.
Scope check
The section expressly speaks of taxable goods; classify the arrangement and transactions before applying it.
Practical checklist
Do
- Record agency agreement and goods movements.
- Identify which taxable goods were supplied or received for the principal.
- Reconcile tax paid and remaining dues.
Avoid
- Assume a private contract, merger date or restructuring automatically removes statutory GST liability.
Frequently asked questions
Does section 86 expressly cover every service agency arrangement?
Its text specifically addresses taxable goods supplied or received by an agent for a principal.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026