Taxation · Charge of GST

Levy and Charge of GST under Section 9 (CGST Act)

Updated 5 October 2026 · Fact-checked

Section 9 of the CGST Act is the charging section. It levies CGST on intra-State supplies of goods or services or both, on the value determined under section 15, at rates notified on the Council's recommendation. Alcohol for human consumption is outside it, and petroleum products are taxed only from a notified date. The supplier usually pays it.

Understand Levy and Charge of GST under Section 9

GST is a tax on supply. Section 9 of the CGST Act is the charging provision. It says tax called central goods and services tax is levied on all intra-State supplies of goods or services or both, on the value determined under section 15, at rates notified by the Government, not exceeding 20%, on the recommendation of the GST Council. It is collected in the way the Act prescribes. The State GST Acts and the UTGST Act carry a similar 20% cap for SGST and UTGST.

There are two parts to remember: levy and collection. Levy is the legal charge on the supply. Collection is who actually pays it to the Government. Usually the supplier collects and pays. In some cases the recipient pays under reverse charge.

The same structure works for the State and Union Territory. SGST is levied under the State GST Acts and UTGST under the UTGST Act, 2017, on intra-State supplies. IGST is levied under section 5 of the IGST Act on inter-State supplies (and imports), at rates not exceeding 40%. So for one supply, either CGST + SGST/UTGST applies (intra-State) or IGST applies (inter-State), never both.

The levy has exceptions. Alcoholic liquor for human consumption is outside GST. Tax on petroleum crude, high speed diesel, motor spirit (petrol), natural gas and aviation turbine fuel is levied only from a date notified on the Council's recommendation.

Tobacco products are taxable under GST, and central excise is also levied on them. This is not an exception to the GST levy.

For a supply to be charged you need: a supply as defined in section 7 (Schedule I lists activities treated as supply even if made without consideration), made in the taxable territory. Taxable territory is defined in the IGST Act, 2017, which the CGST Act adopts for its own use. It is not defined in section 9 itself. Normally the supplier collects and pays the tax. Under reverse charge, however, the recipient pays the tax. Under section 9(3), this applies to notified categories of goods or services or both, and the supplier may be registered or unregistered. Under section 9(4), it applies only to a notified class of registered recipients receiving notified categories of supply from an unregistered supplier. Also check whether the supply is exempt, or whether the supplier is below the registration threshold or under composition.

Key rules to remember

Charging rule (CGST): CGST is levied on intra-State supply of goods and/or services at notified rate, on value under section 15; Section 9(1). Rate is notified on Council's recommendation. The CGST cap is 20% under section 9(1); the State GST Acts and the UTGST Act have a similar 20% cap.
Tax on intra-State supply: Total GST = CGST + SGST (or UTGST); Normally the rate is split equally between Centre and State, for example 18% = 9% CGST + 9% SGST.
Tax on inter-State supply: Total GST = IGST (single levy); Levied under section 5 of IGST Act. Cap 40%.
Value on which tax is levied: Tax = Value under section 15 × Rate; Tax is computed on the value determined under section 15. That value is the transaction value, that is, the price actually paid or payable, only where the supplier and recipient are not related and the price is the sole consideration for the supply. If either condition fails, the valuation rules made under the Act apply instead. Where transaction value applies, it includes certain items such as taxes, duties, cesses and fees charged under other laws (not GST) and incidental expenses charged by the supplier, such as commission and packing. It excludes the GST itself.
Reverse charge: Section 9(3): tax on notified categories of goods or services or both; section 9(4): tax on notified categories of supply of goods or services or both received by a notified class of registered persons from an unregistered supplier; Recipient pays tax on reverse charge instead of the supplier. Under section 9(3) the supplier may be registered or unregistered. Section 9(4) applies only to the notified class of registered recipients, the notified categories of supply and an unregistered supplier. Under the IGST Act, similar provisions are in section 5(3) and 5(4).
E-commerce operator liability: Section 9(5) CGST: tax on notified categories of services paid by the operator (section 5(5) IGST for inter-State supplies); Applies only to categories of services notified by the Government. The operator is liable to pay tax only for the notified services, not for other supplies made through it. Section 9(5) of the CGST Act covers intra-State supplies made through the operator. Section 5(5) of the IGST Act applies the same rule to inter-State supplies made through the operator. Notified services have included transportation of passengers by motor vehicle, accommodation in hotels supplied through the operator by unregistered persons, and restaurant services other than those supplied by restaurants at specified premises, each subject to the conditions and exceptions in the notification. For these notified services the operator is treated as the person liable to pay tax.
Excluded from GST: Alcoholic liquor for human consumption; Petroleum products are taxable only from a notified date.

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

Use this order for any question on levy and charge. It keeps you from missing the exception or the person liable.

1Identify whether there is a supply under section 7: normally a supply of goods or services made for consideration in the course or furtherance of business, or a deemed supply under Schedule I.
2Check the supply is not outside GST: alcohol for human consumption, or petroleum products before the notified date.
3Decide whether the supply is intra-State or inter-State using location of supplier and place of supply. This decides CGST + SGST/UTGST or IGST.
4Check exemptions, the registration threshold and composition status, as these may remove or change the liability.
5Decide who pays: the supplier (forward charge), the recipient (reverse charge under section 9(3), or under section 9(4) where a notified class of registered persons receives notified supplies from an unregistered supplier) or the e-commerce operator (section 9(5), only for notified categories of services).
6Find the value under section 15 (including items such as other taxes and incidental expenses, but excluding GST) and apply the rate, splitting equally between CGST and SGST for intra-State.
7State your conclusion clearly with the section reference.

Quickest way: Four-question filter for MCQs and written answers

When to use it: Use it when the question asks 'is GST leviable' or 'who is liable'.

Ask: is it a supply? If no, there is no levy.
Ask: is it alcohol for human consumption? If yes, no GST.
Ask: intra-State or inter-State? Pick CGST + SGST or IGST.
Ask: who pays? Supplier, recipient (RCM) or e-commerce operator.
In written answers use the format: provision, facts, conclusion. Write 'Section 9(1) levies CGST on intra-State supply', apply the facts, then give the tax figure. Step marks come for the section, the classification and the computation.

Common mistakes in Levy and Charge of GST under Section 9

Charging both IGST and CGST/SGST on the same supply.
Students apply all three taxes automatically.
Fix: Decide the nature of supply first. Intra-State means CGST + SGST/UTGST. Inter-State means IGST only.
Treating alcohol for human consumption as taxable under GST.
Students assume GST covers all goods.
Fix: Remember the exclusion in the Constitution and Section 9. Alcohol for human consumption stays with State levies.
Saying petroleum products are fully outside GST for all purposes.
Confusing exclusion with deferral.
Fix: They are in GST in principle, but tax applies only from a date notified on the Council's recommendation. Until then, they are not taxed under GST.
Assuming the supplier always pays the tax.
Forward charge is the common case.
Fix: Check for reverse charge on notified goods/services under section 9(3), notified supplies received by a notified class of registered persons from unregistered suppliers under section 9(4), and notified categories of e-commerce services under section 9(5), before naming the payer.
Computing tax on a value that already includes GST.
Not reading whether the price is inclusive or exclusive.
Fix: If inclusive, find value as Price × 100 ÷ (100 + rate), then compute tax.
Ignoring exemption or threshold when stating that tax is levied.
Focusing only on the charging section.
Fix: Levy under section 9 is subject to exemptions and to registration limits. State that tax is leviable but check exemption and registration.

Worked examples

Example 1

Rohan, a registered dealer in Pune, sells goods to a registered dealer in Nashik (both in Maharashtra) for ₹2,00,000 exclusive of tax. The GST rate is 18%. Compute the GST and state the tax levied.

Show the solution

The supplier and place of supply are both in Maharashtra, so the supply is intra-State.
Section 9 applies: CGST and SGST are levied, not IGST.
Total GST = 18% of ₹2,00,000 = ₹36,000.
CGST at 9% = ₹18,000.
SGST at 9% = ₹18,000.

Answer: Tax is CGST ₹18,000 and SGST ₹18,000, total ₹36,000. No IGST arises.

Example 2

A trader in Jaipur (Rajasthan) supplies goods worth ₹5,90,000, inclusive of 18% GST, to a registered buyer in Indore (Madhya Pradesh). Find the taxable value and the tax payable, and state the Act under which the levy arises.

Show the solution

The supplier is in Rajasthan and the place of supply is Madhya Pradesh, so the supply is inter-State.
The levy is IGST under section 5 of the IGST Act, not CGST under section 9.
The price is inclusive of tax, so taxable value = ₹5,90,000 × 100 ÷ 118 = ₹5,00,000.
IGST = 18% of ₹5,00,000 = ₹90,000.
Check: ₹5,00,000 + ₹90,000 = ₹5,90,000.

Answer: Taxable value is ₹5,00,000 and IGST payable is ₹90,000, levied under section 5 of the IGST Act.

Exam tips

Most MCQs test the exclusions: alcohol for human consumption and the deferred petroleum products. Memorise both.
In MCQs, first decide intra-State or inter-State, then pick the tax. This removes two options quickly.
In written answers, quote section 9(1) for levy and section 9(3), 9(4) or 9(5) for the person liable, then apply the facts.
Always check whether the price given is inclusive or exclusive of GST before computing.
Do not state exemption and rate details beyond the question. Marks come for correct application, not extra detail.

Practice questions from Charge of GST

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

What does Section 9 of the CGST Act say?

It is the charging section. It levies CGST on intra-State supplies of goods or services or both, at notified rates, on the value under section 15. It also covers reverse charge and tax payable by e-commerce operators on notified categories of services.

What is the difference between levy and collection of GST?

Levy is the legal imposition of tax on a supply. Collection is the mechanism of who pays it to the Government. The supplier usually collects, but under reverse charge the recipient pays.

Is GST levied on alcohol and petroleum?

Alcoholic liquor for human consumption is outside GST. Petroleum crude, diesel, petrol, natural gas and aviation turbine fuel come under GST only from a date notified on the Council's recommendation.

When is IGST charged instead of CGST and SGST?

IGST is charged on inter-State supplies and imports under the IGST Act. CGST and SGST/UTGST are charged on intra-State supplies. Only one set applies to a given supply.