Section 9 of CGST Act, 2017 - Levy and Collection of Central GST

Section 9 of the Central Goods and Services Tax Act, 2017 is the principal charging provision for Central GST on intra-State supplies. It also provides for reverse charge liability and, for notified services supplied through an electronic commerce operator, liability of the operator to pay tax.

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Meaning and scope of Section 9

Levy means the legal imposition of tax. Collection refers to the manner in which the tax so levied is collected and paid. Under Section 9(1), CGST applies to intra-State supplies of goods or services or both, subject to Section 9(2), on the value determined under Section 15 and at notified rates not exceeding 20%.

The charging provision must be read with Section 7 (scope of supply), Section 8 (composite and mixed supplies), Section 15 (valuation), applicable rate notifications, exemption notifications and the CGST Rules.

Important update: With effect from 1 November 2024, Section 9(1) also excludes un-denatured extra neutral alcohol or rectified spirit used for manufacture of alcoholic liquor for human consumption. The earlier page did not contain this amendment.

Updated text of Section 9 - Levy and Collection

(1) Subject to sub-section (2), central goods and services tax is levied on intra-State supplies of goods or services or both, except the supply of alcoholic liquor for human consumption and un-denatured extra neutral alcohol or rectified spirit used for manufacture of alcoholic liquor for human consumption. The tax is charged on the value determined under Section 15, at rates notified by the Government on the recommendations of the GST Council, not exceeding 20%, and is payable by the taxable person.

(2) Central tax on petroleum crude, high speed diesel, motor spirit (petrol), natural gas and aviation turbine fuel becomes leviable from a date notified by the Government on the recommendations of the GST Council.

(3) The Government may, on the recommendations of the GST Council, notify categories of goods or services or both for which tax is payable by the recipient under reverse charge. The Act then applies to the recipient as if the recipient were the person liable to pay tax on that supply.

(4) The Government may, on the recommendations of the GST Council, notify a class of registered persons who must pay tax under reverse charge on specified categories of goods or services or both received from an unregistered supplier. The recipient is treated as the person liable to pay tax for those supplies.

(5) For notified categories of services supplied through an electronic commerce operator, the Government may require the electronic commerce operator to pay tax on the intra-State supply as if it were the supplier. Where the operator has no physical presence in the taxable territory, its representative is liable; where it has neither physical presence nor a representative, it must appoint a person in the taxable territory for payment of tax.

The text above is presented in reader-friendly form. For statutory wording and amendment notes, refer to the official India Code and CBIC resources linked in the sidebar.

Section 9 explained sub-section by sub-section

ProvisionWhat it covers
Section 9(1)General levy of CGST on intra-State taxable supplies, subject to exclusions and Section 9(2).
Section 9(2)Specified petroleum products remain outside the operative CGST levy until a notified commencement date.
Section 9(3)Reverse charge for notified categories of supplies; the recipient pays CGST.
Section 9(4)Reverse charge for notified classes of registered recipients receiving specified supplies from unregistered suppliers. It is not a general reverse charge on every purchase from an unregistered person.
Section 9(5)For notified services supplied through an electronic commerce operator, the operator is treated as the person liable to pay tax.

Reverse charge under Section 9(3) and Section 9(4)

Reverse charge shifts the statutory liability to pay GST from the supplier to the recipient for supplies covered by the relevant provision and notification.

Section 9(3) operates only for categories of goods, services or both notified by the Government on the recommendations of the GST Council. The applicable notification must therefore be checked before treating a supply as liable under reverse charge.

Section 9(4) was substituted with effect from 1 February 2019. Its present scope is notification-based: the Government specifies the class of registered persons and the specified categories of supplies received from unregistered suppliers for which reverse charge applies. Accordingly, the older proposition that every registered recipient must pay GST on every taxable purchase from an unregistered supplier is no longer the statutory rule.

Electronic commerce operator liability under Section 9(5)

Section 9(5) is a special charging mechanism for notified categories of services supplied through an electronic commerce operator. For such notified services, the operator is liable to pay CGST as though the operator were the supplier. Notification No. 17/2017-Central Tax (Rate), as amended from time to time, is a key notification issued under this provision.

This mechanism is distinct from tax collection at source under Section 52. Section 9(5) fixes the liability to pay tax on specified services, whereas Section 52 contains the separate TCS framework for electronic commerce operators where applicable.

Relationship with value and rate of tax

Section 9 creates the levy, but the amount payable depends on the taxable value under Section 15 and the rate prescribed by the applicable notification. Exemptions, concessional rates, classification and special valuation rules can therefore materially affect the final liability.

Practical point: Always verify the current rate, exemption and reverse-charge notifications applicable to the particular goods or services. Section 9 supplies the charging framework; notification-based treatment can change by category and effective date.