Section 9 of CGST Act 2017: Levy and Collection

Provisions under Section 9 of the Central Goods and Services Tax (CGST) Act, 2017 relating to “Levy and Collection”:

Section 9 of CGST Act 2017: Levy and Collection (CHAPTER III LEVY AND COLLECTION OF TAX)

(1) Subject to the provisions of sub-section (2), there shall be levied a tax called the central goods and services tax on all intra-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined under section 15 and at such rates, not exceeding twenty per cent, as may be notified by the Government on the recommendations of the Council and collected in such manner as may be prescribed and shall be paid by the taxable person.

(2) The central tax on the supply of petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel shall be levied with effect from such date as may be notified by the Government on the recommendations of the Council.

(3) The Government may, on the recommendations of the Council, by notification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.

(4) The central tax in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both. [Refer Note 1]

(4) The Government may, on the recommendations of the Council, by notification, specify a class of registered persons who shall, in respect of supply of specified categories of goods or services or both received from an unregistered supplier, pay the tax on reverse charge basis as the recipient of such supply of goods or services or both, and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to such supply of goods or services or both.

(5) The Government may, on the recommendations of the Council, by notification, specify categories of services the tax on intra-State supplies of which shall be paid by the electronic commerce operator if such services are supplied through it, and all the provisions of this Act shall apply to such electronic commerce operator as if he is the supplier liable for paying the tax in relation to the supply of such services:

Provided that where an electronic commerce operator does not have a physical presence in the taxable territory, any person representing such electronic commerce operator for any purpose in the taxable territory shall be liable to pay tax:

Provided further that where an electronic commerce operator does not have a physical presence in the taxable territory and also he does not have a representative in the said territory, such electronic commerce operator shall appoint a person in the taxable territory for the purpose of paying tax and such person shall be liable to pay tax.

Amendments History:

1. Sub-section (4) substituted, vide Section 4 of the CGST (Amendment) Act, 2018 (GOI Notification dated 29/08/2018), followed with Notification 2/2019 on commencement date of 01/02/2019.

Commentary on Section 9 of the CGST Act

Section 9 of the Central Goods and Services Tax (CGST) Act, 2017 deals with the levy and collection of taxes on intra-State supplies of goods and services. Here’s a commentary on the provisions with relevant examples:

Section 9(1) of the CGST Act

Sub-section (1) relates to the levy of CGST on all intra-State supplies of goods and services, with the exception of alcoholic liquor for human consumption. The tax rates shall not exceed 20% and shall be determined by the Government based on the recommendations of the GST Council. The taxable person (supplier) is liable to pay this tax. For instance, if a manufacturer in Delhi sells goods to a retailer in Delhi, CGST will be levied on this intra-State transaction.

Section 9(2) of the CGST Act

Sub-section (2) states that the central tax on specific items, namely petroleum crude, high-speed diesel, motor spirit (petrol), natural gas and aviation turbine fuel, will be levied from a date to be notified by the Government based on the GST Council’s recommendations.

Section 9(3) of the CGST Act

Sub-section (3) allows the Government to specify categories of goods or services for which the tax must be paid by the recipient on a reverse charge basis. This means that the recipient becomes liable for paying the tax instead of the supplier. For example, if the Government specifies legal consultancy services under the reverse charge mechanism, a company availing such services will pay the tax directly to the government rather than the legal consultant paying it.

Section 9(4) of the CGST Act

Sub-section (4) permits the Government to specify a class of registered persons who must pay the tax on a reverse charge basis for specific categories of goods or services received from an unregistered supplier. In this case, the recipient is considered the person liable for paying the tax. For example, if a registered business receives certain goods from an unregistered supplier, the registered business will be responsible for paying the tax under the reverse charge mechanism.

Section 9(5) of the CGST Act

Sub-section (5) allows the Government to specify categories of services for which the tax on intra-State supplies must be paid by the electronic commerce operator (e.g., e-commerce platforms like Amazon or Flipkart) if such services are supplied through it. The e-commerce operator will be considered the supplier liable for paying the tax. However, if the e-commerce operator doesn’t have a physical presence or representative in the taxable territory, they must appoint a person in that territory to be liable for paying the tax.

In summary, Section 9 of the CGST Act, 2017 outlines the levy and collection of central goods and services tax on intra-State supplies, with specific provisions for reverse charge mechanisms and electronic commerce operators.

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Note: The CGST Act 2017 has been notified vide GOI Notification dt. 12/04/2017, which has subsequently been amended through CGST (Extension to J&K) Act 2017, Finance Act 2018, CGST Amendment Act 2018, Finance Act 2019, Finance Act 2020, Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance 2020, Finance Act 2021, Finance Act 2022 including various Notifications issued by the Govt./ CBIC from time to time, relating to the commencement dates of various Sections/ Provisions in the respective CGST/ Amendment Acts, wherever required. Information on this page is a Section-wise compilation of the Amendments made by various Notifications issued by CBIC from time to time, with best possible efforts for accuracy. In any case, E&OE. For official/ updated information, please visit CBIC website.