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 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. [Refer Note 2]

(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. CBEC notifies 01/07/2017 as the Commencement date for Section 9 of the CGST Act 2017, vide Central Tax Notification 9/2017 dt. 28/06/2017.

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

(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.

Commentary on Section 9 of the CGST Act

Section 9 of the CGST Act 2017 lays down provisions related to the levy and collection of taxes under the GST regime in India. This Section is the charging section of the CGST Act, which determines the applicability and rate of the tax on the supply of goods or services or both within a state. Here is an overview of the section:

i) Levy and collection of tax: Section 9(1) states that 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 percent, 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.

ii) Composition levy: Section 9(2) provides for a Composition Levy, which is an optional scheme allowing eligible taxpayers with an annual turnover below a certain threshold to pay a fixed percentage of their turnover as tax instead of the standard GST rates. This scheme is designed to simplify compliance and reduce the tax burden for small businesses.

iii) Reverse charge mechanism: Section 9(3) and 9(4) introduce the reverse charge mechanism (RCM), wherein the recipient of goods or services is liable to pay GST instead of the supplier. The government may notify specific categories of goods or services for which the recipient will be liable to pay tax on a reverse charge basis. The purpose of RCM is to improve tax compliance and bring unregistered suppliers under the tax net.

iv) E-commerce operators: Section 9(5) deals with e-commerce operators, who are required to collect tax at source (TCS) for certain notified categories of supplies made through their platforms. The e-commerce operators are liable to pay the tax collected, and the suppliers can claim credit for the same.

Section 9 of the CGST Act 2017 is the foundation of the GST regime, governing the levy and collection of CGST on intra-state supplies of goods and services. It establishes the tax’s applicability, rates, composition levy, reverse charge mechanism, and provisions for e-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 Amendments made by all such Notifications, with best possible efforts for accuracy. In any case, E&OE. For official/ updated information, please visit CBIC website.