Tax Laws and Practice · Levy and Collection of GST

Levy and Collection of GST under Section 9 CGST

Updated 11 October 2026 · Fact-checked

Section 9 of the CGST Act is the charging section. It levies CGST on all intra-State supplies of goods or services or both, on the value under section 15, at notified rates not exceeding 20%, and the taxable person pays it. Alcohol for human consumption is outside it, and petroleum products come in only from a notified date.

Understand Levy and Collection of GST under Section 9

Every tax needs a charging section. For GST on intra-State supplies, that section is Section 9 of the CGST Act. It tells you what is taxed, on what value, at what rate and who pays.

The taxable event is the supply of goods or services or both. Section 9(1) levies CGST on all intra-State supplies. The tax is not on manufacture, sale or consumption as separate events. It is on supply.

The levy has four building blocks. First, the subject: intra-State supplies of goods or services or both. Second, the value: the value determined under section 15. Third, the rate: as notified by the Government on the Council's recommendations, not exceeding twenty per cent. Fourth, the person liable: the taxable person, with collection in the prescribed manner.

There are carve-outs. Supply of alcoholic liquor for human consumption is excluded. Un-denatured extra neutral alcohol or rectified spirit used to make alcoholic liquor for human consumption is also excluded. Under Section 9(2), 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 recommendations.

Section 9 also moves liability away from the supplier in some cases. Under 9(3) the recipient pays on notified categories (reverse charge). Under 9(4) notified registered persons pay on specified supplies received from unregistered suppliers. Under 9(5) the electronic commerce operator pays on notified services supplied through it. Inter-State supplies are charged to IGST under the IGST Act, which this section does not cover.

Key rules to remember

Charge of CGST: CGST = Rate × Value under section 15, on intra-State supplies; Section 9(1). Levied on supply of goods or services or both, paid by the taxable person.
Rate ceiling: CGST rate ≤ 20%; The Government notifies the rate on the Council's recommendations. Twenty per cent is the upper limit for CGST.
Excluded supplies: Alcoholic liquor for human consumption, and un-denatured ENA or rectified spirit used to make it, are outside the levy; Section 9(1). These are outside GST.
Petroleum products: Levy on crude, HSD, petrol, natural gas, ATF applies from a notified date; Section 9(2). Until notified, GST is not levied on them.
Reverse charge, notified categories: Recipient pays tax on notified categories of supply; Section 9(3). The recipient is treated as the person liable to pay.
Reverse charge, unregistered supplier: Notified class of registered persons pays tax on specified supplies from unregistered suppliers; Section 9(4).
E-commerce operator: ECO pays tax on notified services supplied through it; Section 9(5). If the ECO has no physical presence in the taxable territory, its representative pays; if there is none, it must appoint a person to pay.

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

Use this order for any question on levy and collection. It keeps your answer in ICSI style: provision, analysis, conclusion.

1Identify the transaction and confirm it is a supply of goods or services or both. No supply, no GST.
2Check the place of supply and location of supplier to decide whether it is intra-State (CGST plus SGST/UTGST) or inter-State (IGST).
3Check whether the goods are excluded: alcoholic liquor for human consumption, or the specified alcohol used to make it.
4Check whether the goods are petroleum crude, HSD, petrol, natural gas or ATF, and whether a date has been notified.
5Decide who pays: the supplier by default, or the recipient under 9(3) or 9(4), or the e-commerce operator under 9(5).
6Fix the value under section 15 and apply the notified rate, remembering the 20% ceiling.
7State your conclusion clearly, citing Section 9 and the relevant sub-section.

Quickest way: Four-question check on the charge

When to use it: Use this for short-answer or case-based questions where time is tight.

Is there a supply, and is it intra-State?
Is it excluded or deferred (alcohol for human consumption, petroleum products)?
Who is liable: supplier, recipient or ECO?
Write the section: 9(1) for levy, 9(2) petroleum, 9(3) and 9(4) reverse charge, 9(5) ECO.

Common mistakes in Levy and Collection of GST under Section 9

Saying Section 9 taxes sale or manufacture.
Students carry over the idea of excise and sales tax.
Fix: State that the taxable event is supply of goods or services or both.
Stating that GST applies to alcohol for human consumption.
Students remember alcohol as a state revenue item but forget the exact exclusion.
Fix: Say that alcoholic liquor for human consumption is excluded, and also the specified un-denatured ENA or rectified spirit used to make it.
Assuming petroleum products are taxed from the start.
They are listed in the section, so students treat them as covered.
Fix: Quote Section 9(2): the levy applies only from the date notified on the Council's recommendations.
Saying the rate is fixed at 20%.
Confusing the ceiling with the rate.
Fix: Write that rates are notified and cannot exceed twenty per cent.
Applying Section 9 to inter-State supplies.
Students treat CGST and IGST as one levy.
Fix: Say Section 9 levies CGST on intra-State supplies. Inter-State supplies attract IGST under the IGST Act.
Treating reverse charge under 9(3) and 9(4) as the same.
Both shift liability to the recipient.
Fix: 9(3) covers notified categories of supply, whoever the supplier is. 9(4) covers a notified class of registered recipients buying specified supplies from unregistered suppliers.

Worked examples

Example 1

Explain the scope of the levy under Section 9(1) of the CGST Act, 2017. Is the supply of alcoholic liquor for human consumption covered?

Show the solution

Provision: Section 9(1) levies CGST on all intra-State supplies of goods or services or both, on the value under section 15, at notified rates not exceeding twenty per cent., payable by the taxable person.
Analysis: The taxable event is supply. The levy is on intra-State supplies only, subject to Section 9(2).
The same sub-section excludes the supply of alcoholic liquor for human consumption, and un-denatured extra neutral alcohol or rectified spirit used for manufacturing such liquor.
Conclusion: Supply of alcoholic liquor for human consumption is not subject to CGST.

Answer: CGST is levied on all intra-State supplies under Section 9(1), except alcoholic liquor for human consumption, which is excluded.

Example 2

Sundaram Traders of Chennai supplies goods to a buyer in Madurai (both in Tamil Nadu). A director asks whether any CGST is leviable, who pays it, and whether a rate of 28% could be notified for CGST.

Show the solution

Both parties are in Tamil Nadu, so it is an intra-State supply of goods. Section 9(1) applies.
The supplier is the taxable person and pays the tax, unless a reverse charge notification applies to this supply under 9(3) or 9(4). None is given here.
Rate: the Government notifies CGST rates on the Council's recommendations, but not exceeding twenty per cent.
A CGST rate of 28% would exceed the ceiling, so it cannot be notified.
Conclusion: CGST is leviable, Sundaram Traders pays it, and the maximum CGST rate is 20%.

Answer: CGST is leviable under Section 9(1). Sundaram Traders pays it. A 28% CGST rate cannot be notified, as the ceiling is twenty per cent.

Exam tips

Start every answer with the words of Section 9(1): intra-State, supply, section 15 value, notified rate, twenty per cent., taxable person.
Learn the sub-sections in order: (1) levy, (2) petroleum, (3) and (4) reverse charge, (5) ECO. Cite the exact one.
Do not mix up the exclusion for alcohol with the deferred levy on petroleum products. Examiners often test them together.
In case questions, decide intra-State or inter-State first, then who pays.
Close with a one-line conclusion. ICSI marking rewards a clear final answer.

Practice questions from Levy and Collection 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 is the charging section of GST?

For intra-State supplies, Section 9 of the CGST Act is the charging section. It levies CGST on supply of goods or services or both. IGST on inter-State supplies is levied under the IGST Act.

What is the maximum CGST rate?

Section 9(1) says the rate is notified by the Government on the Council's recommendations and cannot exceed twenty per cent. The actual rate depends on the notification.

Is GST levied on petrol and diesel?

Under Section 9(2), central tax on petroleum crude, high speed diesel, petrol, natural gas and aviation turbine fuel is levied from a date to be notified on the Council's recommendations. Until then, it is not levied.

Who pays tax under Section 9?

The taxable person pays by default. Under 9(3) and 9(4) the recipient pays on notified supplies, and under 9(5) the electronic commerce operator pays on notified services.