Indirect Tax Laws · Charge of GST

Levy and Collection of GST under Section 9 of the CGST Act

Updated 5 October 2026 · Fact-checked

Section 9 of the CGST Act levies central GST on all intra-State supplies of goods or services or both, except alcoholic liquor for human consumption. CGST is levied on the section 15 value at notified rates not exceeding 20%. SGST or UTGST is a separate levy under State or UT law. The taxable person pays, or the recipient under reverse charge.

Understand Levy and Collection of GST under Section 9

Section 9 is the charging section of the CGST Act. Without a charging section, there is no tax. It tells you three things: what is taxed, on what value, and at what rate. Everything else in the Act (time, value, credit, returns) works around this section.

The taxable event is a supply of goods or services or both. The supply must be an intra-State supply, meaning the location of supplier and place of supply are in the same State or Union territory. Whether a transaction is a supply is decided under section 7. Whether it is intra-State is decided under the IGST Act. If the supply is inter-State, IGST applies instead of CGST.

A supply made in the same State attracts two taxes: CGST (Centre) and SGST (State), or UTGST in a Union territory. Section 9 of the CGST Act deals only with CGST. SGST and UTGST are levied under the State GST Acts and the UTGST Act. CGST is levied at notified rates not exceeding 20%. The rate is set by notification on the recommendation of the GST Council, so you must apply the notified rate given in the question.

The tax is levied on the value determined under section 15, normally the transaction value. It is collected in the manner prescribed and is paid by the taxable person. A taxable person is a person who is registered, or is liable to be registered, under the Act. For categories of supply that the Government notifies on the Council's recommendation, the law shifts the liability to the recipient under reverse charge (section 9(3)). The recipient is then treated as the person liable for paying the tax. For notified services, the liability falls on an e-commerce operator (section 9(5)).

Two special cases matter. First, alcoholic liquor for human consumption is outside the levy. Second, section 9(2) deals with petroleum crude, high speed diesel, motor spirit (petrol), natural gas and aviation turbine fuel. CGST on the supply of these five goods is leviable only with effect from a date the Government notifies on the Council's recommendation. Until that date, CGST is not levied on the supply of those goods. This concerns supplies of the goods only. Services related to them, such as transport or job work, are not covered by section 9(2) and are tested on their own facts.

Key rules to remember

Charge of CGST: CGST is levied on: intra-State supply of goods or services or both × value under section 15 × notified CGST rate; CGST is levied at notified rates not exceeding 20%. SGST or UTGST is a separate levy under State or UT law, charged in addition on the same value.
Tax on an intra-State supply: Total GST = CGST + SGST/UTGST, each = taxable value × its notified rate; For equal rates of r% each, total GST = 2r% of the taxable value.
Exclusion from levy: Alcoholic liquor for human consumption = outside CGST levy; Other alcohol-related items are not excluded merely because they involve alcohol. Check whether it is for human consumption.
Petroleum products: Supply of petroleum crude, HSD, petrol, natural gas and ATF = CGST leviable only from the date notified under section 9(2); Section 9(2) gives the power to levy CGST on the supply of these five goods from a notified date, on the Council's recommendation. Until then, CGST is not levied on supplies of those goods. Related services are not covered by this rule.
Who pays: Taxable person pays; recipient pays where reverse charge is notified under section 9(3); Section 9(3) applies only to categories of goods or services or both that the Government notifies. For those categories, the recipient is treated as the person liable for paying the tax, and all the provisions of the Act apply to the recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.

How to solve Levy and Collection of GST under Section 9 questions

Use this order for any question on the levy of GST. It keeps you from missing the facts that decide the answer.

1Identify whether there is a supply of goods or services or both, using section 7. If it is not a supply, no levy arises.
2Decide whether the supply is intra-State or inter-State by comparing the supplier's location with the place of supply. Intra-State means CGST plus SGST/UTGST under Section 9. Inter-State means IGST.
3Check the special cases: alcoholic liquor for human consumption is excluded, and the supply of the five petroleum goods is leviable only from the date notified under section 9(2). If that date has not been notified, CGST is not levied on the supply of those goods. Related services are tested separately.
4Identify who is liable to pay: the supplier as a taxable person, or the recipient if the supply falls in a category notified for reverse charge under section 9(3), or an e-commerce operator under section 9(5).
5Determine the taxable value under section 15, and note anything to be added or excluded as given in the facts.
6Apply the notified rate given in the question to the value. Compute CGST and SGST/UTGST separately.
7State the conclusion in provision-facts-conclusion form: cite the rule, link it to the facts, give the tax amount and who pays.

Quickest way: Five-check shortcut for levy questions

When to use it: Use this for short MCQs and for the first few lines of a written answer when time is tight.

Ask: is it a supply? If no, stop.
Ask: same State for supplier location and place of supply? If yes, CGST plus SGST/UTGST. If no, IGST.
Ask: is it alcohol for human consumption, or a supply of one of the five petroleum goods whose levy date has not been notified? If yes, CGST is not levied on that supply.
Ask: is reverse charge notified for this category of supply? If yes, the recipient pays.
Multiply the section 15 value by the given rate for each tax and add them.

Common mistakes in Levy and Collection of GST under Section 9

Charging GST on alcoholic liquor for human consumption
Students remember that liquor is taxed elsewhere and assume GST applies to anything sold by a registered dealer.
Fix: Remember that section 9(1) itself excludes it. Read for words like 'for human consumption' and exclude only those supplies.
Applying CGST and SGST to an inter-State supply
The seller's address is read alone, without the place of supply.
Fix: Always compare location of supplier with place of supply before choosing the tax. Section 9 applies only to intra-State supplies.
Treating the 20% cap as the actual rate
The figure is in the section, so it gets used in sums.
Fix: The 20% is only a ceiling for notified CGST rates. Always use the rate given in the question or notification.
Assuming the supplier always pays the tax
The words 'paid by the taxable person' are read without section 9(3) and 9(5).
Fix: Check the facts for notified reverse charge supplies or e-commerce operator liability before naming the payer.
Charging CGST on supplies of the five petroleum goods as if the levy had already begun
Students think section 9(2) brings them in automatically, or they treat related services as covered by it too.
Fix: Section 9(2) only gives the power to levy from a notified date. Unless the question says the date has been notified, CGST is not levied on the supply of these five goods. Services related to them are not covered by this rule.
Computing tax on the invoice total instead of the section 15 value
Students apply the rate to an amount that already includes GST.
Fix: Section 15 excludes the GST itself from value, so first strip out tax if the figure is tax-inclusive. Then apply the rate to the taxable value.

Worked examples

Example 1

Case: Kavya Traders, registered in Pune, Maharashtra, sells electronic goods to a registered buyer in Nagpur, Maharashtra. The taxable value under section 15 is ₹5,00,000. Assume the notified CGST rate is 9% and the SGST rate is 9%. State the GST liability and who pays it.

Show the solution

Provision: Section 9(1) levies CGST on intra-State supplies of goods or services or both, on the section 15 value, at notified rates, payable by the taxable person. SGST is levied in addition by the State law.
Facts: The supplier is in Pune and the goods go to Nagpur. Both are in Maharashtra, so the supply is intra-State. The goods are not alcoholic liquor. No reverse charge is mentioned.
CGST = 9% × ₹5,00,000 = ₹45,000.
SGST = 9% × ₹5,00,000 = ₹45,000.
Total GST = ₹45,000 + ₹45,000 = ₹90,000.
Conclusion: Kavya Traders, as the taxable person, must pay the tax.

Answer: CGST ₹45,000 and SGST ₹45,000, total ₹90,000, payable by Kavya Traders as the supplier.

Example 2

Case: Raman Beverages, registered in Ahmedabad, Gujarat, makes intra-State supplies within Gujarat in a month: (a) alcoholic liquor for human consumption, value ₹2,00,000; (b) packaged drinking water, value ₹3,00,000. Assume that for water the CGST rate is 9% and the SGST rate is 9%. Compute the GST payable under section 9 and explain.

Show the solution

Provision: Section 9(1) levies CGST on all intra-State supplies except alcoholic liquor for human consumption.
Supply (a): It is alcoholic liquor for human consumption. It is outside the levy, so no CGST or SGST arises on ₹2,00,000.
Supply (b): It is an intra-State supply of goods that is not excluded. It is taxable on the value of ₹3,00,000.
CGST on (b) = 9% × ₹3,00,000 = ₹27,000.
SGST on (b) = 9% × ₹3,00,000 = ₹27,000.
Total GST payable = ₹27,000 + ₹27,000 = ₹54,000.

Answer: No GST on the liquor of ₹2,00,000. On the water: CGST ₹27,000 and SGST ₹27,000, total ₹54,000, payable by Raman Beverages.

Exam tips

In written answers, start with the provision: 'Section 9(1) levies CGST on intra-State supplies...' and then link each fact. This earns the marks for law and application.
In MCQs, look for the trap word: alcohol for human consumption, petroleum products, or an inter-State supply disguised by a different place of supply.
Always apply the rate given in the question. Do not use remembered rates, since rates are changed by notification.
Show CGST and SGST separately in the working, then the total. It makes marking easy and avoids lost marks.
If reverse charge is hinted at, first check that the supply falls in a category notified under section 9(3). If it does, state that the recipient is treated as the person liable for paying the tax, and that all the provisions of the Act apply to the recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.

Practice questions from Charge of GST

Levy and Collection of GST under Section 9 in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Levy and Collection of GST under Section 9: frequently asked questions

What does Section 9 of the CGST Act deal with?

It is the charging section. It levies CGST on intra-State supplies of goods or services or both, on the value under section 15, at notified rates, payable by the taxable person. It also deals with the power to levy on petroleum products from a notified date, reverse charge and e-commerce operator liability.

Is alcohol outside GST completely?

Only alcoholic liquor for human consumption is excluded from the levy under section 9(1). Other supplies must be tested on their own facts. Read the question carefully to see whether the supply is for human consumption.

What is the maximum rate of CGST?

CGST is levied at notified rates not exceeding 20%. The actual rate is fixed by notification on the recommendation of the GST Council. SGST and UTGST are separate levies under State or UT law. In exams, use the rate given in the question.

Who pays the tax under Section 9?

Normally the taxable person who makes the supply. Where reverse charge is notified under section 9(3), the recipient pays. Section 9(5) puts the liability on the e-commerce operator for notified services.