Section 9 of GST – Levy and collection. Full Details of GST Section 9 – Levy and collection. Explanation of Goods and Service Tax all Sections. After Providing List of all sections of GST here we provide Detailed Explanation of Goods and Service Tax all Sections. This Act may be called the Central Goods and Services Tax Act, 2017. Section Wise Analysis of GST Model Law, in this article you may find complete details regarding Section 9 of GST Model Law – Levy and collection, gst all section and definitions. Now Check more details from below…..
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Section 9 of GST – Levy and collection
Statutory Provisions- Effective from 1st February 2019 vide The Central Goods & Services Tax Amendment Act,2018
Levy and Collection
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 undersection 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.
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.
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
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.
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.
Related Provisions of the Statute
|Section or Rule||Description|
|Section 1||Short title, extent and commencement|
|Section 2(84)||Definition of Person|
|Section 2(107)||Definition of Taxable Person|
|Section 2(108)||Definition of Taxable Supply|
|Section 2(45)||Definition of Electronic Commerce Operator|
|Section 2(98)||Definition of Reverse Charge|
|Section 10||Composition levy|
|Section 11||Power to grant exemption from tax|
|Section 7 (IGST)||Inter-State supply|
|Section 8 (IGST)||Intra-State supply|
|Section 15||Value of supply|
|Section 25||Procedure for Registration|
Related provisions of the Statute
Article 265 of the Constitution of India mandates that no tax shall be levied or collected except by the authority of law. The charging section is a must in any taxing statute for levy and collection of tax. Before imposing any tax, it must be shown that the transaction falls within the ambit of the taxable event and that the person on whom the tax is so imposed also gets covered within the scope and ambit of the charging Section by clear words used in the Section. No one can be taxed by implication. The scope of the taxable event being ‘supply’ has been discussed in the earlier part of this Chapter. This Section will provide an insight into the chargeability of tax on a supply. Section 9 is the charging provision of the CGST Act. It provides the maximum rate of tax that can be levied on supplies leviable to tax under this law, the manner of collection of tax and the person responsible for paying such tax.
It is interesting to note that the 4 pillars of taxation that together constitute the cornerstone for levy are couched in Section 9(1). The taxable event, tax rate, collection or levy, and the person to pay are so worded that there is no escape. It appears that the law laid down by the Honourable Supreme Court in Govind Saran Ganga Saran’s Case has been carried to its logical end.
The IGST Law provides the basis for determination of a supply as an intra-State supply or an inter-State supply – simply put, if the location of the supplier and the place of supply are within the same State, the transaction will be an intra-State supply, barring the case of supplies made by / to SEZ, and all other supplies will be regarded as inter-State supplies. Please refer to the discussion in the IGST Chapters for a holistic understanding of ‘Levy’ as a concept under the GST law.
Taxable supply: Every taxable supply will be subjected to GST. A taxable supply refers to any supply of goods or services or both, which qualifies as a supply in terms of Section 7. The exception to this rule would be all supplies that the levy Section forgoes to tax, as also all those supplies that have been notified to be nil-rated or exempted from tax. The provisions imposing GST are phrased in such a manner so as to exclude the supply of alcoholic liquor for human consumption from the scope of levy itself. However, the law specifies certain other goods whereby the levy of GST has been deferred until such time the goods are notified in this regard to be taxable supplies (by the Government, based on the recommendation of the GST Council):
(1) petroleum crude
(2) high speed diesel
(3) motor spirit (commonly known as petrol)
(4) natural gas and
(5) aviation turbine fuel
Tax payable: The nature of tax would depend upon the nature of supply, viz., inter-State supplies will be liable to IGST and intra-State supplies will be liable to CGST and SGST/UTGST (i.e., UTGST in case intra-State supplies within a particular Union Territory). Every intra-State supply will attract CGST as well as SGST, as follows:
(1) Imposition of CGST by the Union Government of India
(2) Imposition of SGST by the respective State Government or (in case of UTGST, by the Central Government through the appointed Administrator)
Tax shall be payable by a ‘taxable person’: The tax shall be payable by a ‘taxable person’ i.e., a person who is liable to obtain registration, or a person who has obtained registration. Please note that there can be multiple taxable persons for a single person. It comprises separate establishments of persons registered or liable to be registered under sections 22 or section 24 of the CGST Act. Please refer to the discussion under Section 25 for a thorough understanding of this concept. Under the GST law, the person liable to pay the tax levied on a supply under the Statute would be one of the following:
(1) The supplier, in terms of Section 9(1)–Referred to as forward charge. This is ordinarily applicable in case of all supplies unless the supplies qualify under the other two categories, i.e., this would be the residual category of supply wherein the supplier would be liable to pay tax. (In this regard, it must be noted that the term ‘supplier’ is attributed to an establishment, and not to the PAN as a whole. Therefore, if the supply is effected from an establishment in Karnataka, the establishment of the same entity located in say Delhi, cannot discharge the liabilities);
(2) The recipient – Referred to as tax under reverse charge mechanism. In such a case, all the provisions of the Act as are applicable to the supplier in a normal case, would apply to the recipient of supply (being a taxable person, and not the PAN as explained above). A supply would be subjected to tax in the hands of the recipient only in the following cases:
- 1. Notified supplies under Section 9(3): The supply of goods or services is notified as a supply liable to tax in the hands of the recipient vide Notification No. 4/2017-Central Tax (Rate) in case of goods and Notification No. 13/ 2017-Central Tax (Rate) in case of services, as amended from time to time. Please note that the supplier discharging this liability would not render the liability discharged, since the law imposes the obligation on the recipient. The recipient of supply would nevertheless be liable to discharge the taxes, and the relief available to the supplier would be only by way of an application for refund;
- 2. Supplies received from unregistered persons under Section 9(4): The supply is an inward supply of goods and / or services effected by a registered person from an unregistered supplier. In this regard, it may be noted that the levy under this clause applies (as amended by CGST Amendment Act) only in respect of (a) ‘class of registered persons’ and (b) ‘categories of goods or services’, by a notification. As of now, no such notification has been issued. As a result, GST on RCM in case of URD will not be operational. Similar position applies to IGST under section 5(4) of IGST Act.
Frequently Asked Questions
In respect of exchange of goods, namely gold watch for restaurant services, will the transaction be taxable as two different supplies or will it be taxable only in the hands of the main supplier?
Yes, the transaction of exchange is specifically included in the scope of “supply” under Section 7. Thus, exchange could be taxable both ways. Provided the person exchanging gold watch is in the business of selling watches (A contrary view could also be taken. It depends on the facts of each and every case).
What are examples of ‘disposals’ as used in ‘supply’?
“Disposals” could include donation in kind or supplies in a manner other than sale.
Will a not-for-profit entity be liable to tax (if registered under GST) on any supplies effected by it – e.g.: sale of assets received as donation?
Yes, it would be liable to tax on value as may be determined under Section 15, for said sale of donated assets.
Is the levy under reverse charge mechanism applicable only to services?
No, reverse charge applies to supplies of both goods and services by virtue of Notification No.4/2017-CT(Rate) and Notification No.13/2017-CT(Rate) for goods and services respectively.
What will be the implications in case of purchase of goods from unregistered dealers?
Section 9(4) of the CGST Act, 2017 as amended by The CGST Amendment Act, 2018 specified that the tax shall be payable under reverse charge by the specified class of registered persons, in respect of supply of specified categories of goods.
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