Direct and Indirect Taxation · Charge of Tax including Reverse Charge

Levy and Collection of GST under Section 9 CGST Act

Updated 10 October 2026 · Fact-checked

Section 9 of the CGST Act levies central tax on all intra-State supplies of goods or services or both, on the value under section 15, at notified rates not exceeding 20%. The taxable person pays it. Exceptions: alcoholic liquor for human consumption, and petroleum products until notified. Reverse charge shifts payment to the recipient.

Understand Levy and Collection of GST under Section 9

Section 9 is the charging section of the CGST Act. It tells you what is taxed, on what value, at what rate, and who pays. The charge is on supply, not on sale, manufacture or consumption. The supply must be intra-State (within one State or Union territory) for CGST to apply. Inter-State supplies attract IGST under section 5 of the IGST Act.

The tax is levied on the value determined under section 15. The rate is not written in the Act. The Government notifies it on the recommendations of the GST Council, but the rate cannot exceed twenty per cent for central tax. Under the IGST Act, section 5(1), the ceiling is forty per cent. In an intra-State supply, CGST is charged together with State GST (or UTGST), each at its own notified rate.

Two supplies are carved out. First, alcoholic liquor for human consumption is outside the levy. Since 1-11-2024 the carve-out also covers un-denatured extra neutral alcohol or rectified spirit used to make alcoholic liquor for human consumption. Second, central tax on petroleum crude, high speed diesel, motor spirit (petrol), natural gas and aviation turbine fuel applies only from a date the Government notifies on the Council's recommendation.

Normally the taxable person (the supplier) pays the tax. Section 9 also creates exceptions where someone else pays: section 9(3) reverse charge on notified categories of supply, where the recipient is liable; section 9(4) reverse charge on notified supplies received by a notified class of registered persons from an unregistered supplier; and section 9(5) notified services supplied through an electronic commerce operator, who is then treated as the supplier liable to pay. In each case all provisions of the Act apply to the person liable as if they were the supplier.

For the IGST Act, section 20 applies the CGST provisions on scope of supply, time and value of supply, input tax credit, registration, invoices, returns and payment to integrated tax, mutatis mutandis. So you learn the rules once and apply them to both taxes.

Key rules to remember

Charge under section 9(1): CGST = notified rate × value under section 15 (on intra-State supply); Rate is notified by the Government on Council recommendation and cannot exceed 20%.
Rate ceilings: CGST ≤ 20%; IGST ≤ 40%; CGST ceiling is in section 9(1) CGST Act; IGST ceiling is in section 5(1) IGST Act. These are ceilings, not actual rates.
Excluded from levy: Alcoholic liquor for human consumption (and un-denatured extra neutral alcohol or rectified spirit used to make it); Outside GST. The words about alcohol for manufacture were inserted w.e.f. 1-11-2024.
Petroleum products: Levy only from the date notified (section 9(2)); Covers petroleum crude, high speed diesel, petrol, natural gas, aviation turbine fuel.
Who pays: Supplier by default; recipient under 9(3) and 9(4); e-commerce operator under 9(5); The person liable is treated as the supplier for all provisions of the Act.
Reverse charge on unregistered supplier: Section 9(4): notified class of registered persons pays on notified goods or services from an unregistered supplier; Both the class and the supplies must be notified.

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

Use this order for any question on charge of tax under section 9.

1Identify whether there is a supply of goods or services or both. If not, there is no charge.
2Check the place: is it intra-State? If yes, CGST (with SGST/UTGST) applies. If inter-State, IGST applies under section 5 IGST Act.
3Check exclusions: alcoholic liquor for human consumption, and petroleum products not yet notified.
4Determine the value under section 15 and apply the notified rate. Remember the 20% (CGST) and 40% (IGST) ceilings only when the question tests limits.
5Decide who pays: supplier by default; recipient if reverse charge under 9(3) or 9(4) applies; e-commerce operator if 9(5) applies.
6Compute the tax and state the person liable, citing the sub-section.
7Write a one-line conclusion with the section number.

Quickest way: Four-question scan

When to use it: For MCQs and short theory parts where time is tight.

Is it a supply? If no, answer: no tax.
Is it intra-State? Yes means CGST; no means IGST.
Is it alcohol for drinking or an un-notified petroleum product? Then no GST levy now.
Who pays? Look for words like unregistered supplier, notified services, e-commerce operator, which signal 9(4) or 9(5).

Common mistakes in Levy and Collection of GST under Section 9

Quoting 40% as the CGST ceiling
Students mix the IGST ceiling with the CGST ceiling.
Fix: Remember CGST up to 20% (section 9(1)); IGST up to 40% (section 5(1) IGST Act).
Saying GST is charged on all goods including petrol and liquor
Students overlook sections 9(1) and 9(2).
Fix: Liquor for human consumption is outside the levy; petroleum products are taxed only from a notified date.
Thinking the Act fixes the rate
Students assume a rate like 18% is in the section.
Fix: The rate is notified by the Government on Council recommendation; the Act sets only the ceiling.
Treating section 9(3) and 9(4) as the same
Both make the recipient pay.
Fix: 9(3) covers notified categories of supply, whoever the supplier is. 9(4) covers a notified class of registered persons receiving notified supplies from an unregistered supplier.
Charging CGST on an inter-State supply
Students ignore the place-of-supply test.
Fix: CGST applies only to intra-State supplies. Check the location first.
Taxing on the transaction price without checking section 15
Students forget the charge is on the value under section 15.
Fix: State that the tax is on the value determined under section 15, then compute.

Worked examples

Example 1

A Pune manufacturer sells goods worth ₹4,00,000 (value under section 15) to a Nashik dealer. The notified CGST rate is 9% and the SGST rate is 9%. Compute the tax and state who pays.

Show the solution

The supply is of goods, within Maharashtra, so it is intra-State. CGST and SGST apply.
CGST = 9% × ₹4,00,000 = ₹36,000.
SGST = 9% × ₹4,00,000 = ₹36,000.
Total GST = ₹36,000 + ₹36,000 = ₹72,000.
No reverse charge applies, so the supplier, being the taxable person, pays under section 9(1).

Answer: CGST ₹36,000 and SGST ₹36,000, total ₹72,000, payable by the supplier.

Example 2

Can the Government notify a central tax rate of 25% on a service supplied within a State? Explain, and state who pays if a notified service is received by a registered person from an unregistered supplier under section 9(4).

Show the solution

Section 9(1) levies CGST at notified rates not exceeding twenty per cent.
25% exceeds the ceiling, so such a CGST rate cannot be notified under section 9(1).
Under section 9(4), the Government may notify a class of registered persons who pay tax on reverse charge on specified supplies received from an unregistered supplier.
If the recipient belongs to the notified class and the supply is a notified one, the recipient pays and is treated as the person liable for that supply.

Answer: No. The CGST rate cannot exceed 20%. Under section 9(4), the notified registered recipient pays tax on reverse charge.

Exam tips

Learn the two ceilings together: 20% for CGST and 40% for IGST. MCQs often swap them.
Cite the sub-section: 9(1) levy, 9(2) petroleum, 9(3) and 9(4) reverse charge, 9(5) e-commerce operator.
In numerical answers, show CGST and SGST separately before totalling.
Use the phrase 'on the value determined under section 15' in theory answers; it earns the step mark.
For a reverse charge question, name who pays and why, not just the amount.

Practice questions from Charge of Tax including Reverse Charge

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 is the maximum rate of CGST under section 9?

Section 9(1) says the rate notified by the Government cannot exceed twenty per cent. The actual rates are notified on the Council's recommendation and are usually lower.

Is GST levied on alcohol under section 9?

No, for alcoholic liquor for human consumption. The exclusion also covers un-denatured extra neutral alcohol or rectified spirit used to manufacture such liquor.

When does GST apply to petrol and diesel?

Section 9(2) says central tax on petroleum crude, high speed diesel, petrol, natural gas and aviation turbine fuel applies from a date the Government notifies on the Council's recommendation.

Who pays CGST under section 9?

Normally the taxable person who makes the supply. Under 9(3) and 9(4) the recipient pays on reverse charge, and under 9(5) the e-commerce operator pays on notified services.