Goods and Services Tax (GST) and Corporate Tax Planning · Supply under GST

Levy and Collection of Tax under Section 9 of CGST Act

Updated 11 October 2026 · Fact-checked

Section 9 of the CGST Act is the charging section. It levies central tax on all intra-State supplies of goods or services or both, on the value under section 15, at notified rates up to 20%. It also lets the Government shift liability to the recipient (reverse charge) or to the e-commerce operator.

Understand Levy and Collection of Tax under Section 9

Section 9 answers one question: who pays tax, on what, and at what rate. The default rule is simple. Central goods and services tax (CGST) is levied on all intra-State supplies of goods or services or both. The value is the one determined under section 15. The rate is notified by the Government on the Council's recommendation and cannot exceed 20% for CGST. The tax is paid by the taxable person, who is normally the supplier.

There are exceptions. Alcoholic liquor for human consumption is outside the levy. Since 1 November 2024 the exclusion also covers un-denatured extra neutral alcohol or rectified spirit used to make such liquor. Petroleum crude, high speed diesel, petrol, natural gas and aviation turbine fuel are taxed only from a date the Government notifies on the Council's recommendation.

The IGST Act has a parallel provision, section 5, for inter-State supplies. The rate cap there is 40%. IGST on imported goods is levied under the Customs Tariff Act, 1975 along with customs duty, except for goods the Government notifies otherwise.

The next idea is shifting liability. Under section 9(3), the Government can notify categories of supply on which the recipient pays tax. This is reverse charge. The recipient is then treated as the person liable to pay, and all provisions of the Act apply to them. Under section 9(4), a notified class of registered persons pays tax on specified supplies received from an unregistered supplier.

Under section 9(5), the Government can notify services on which the electronic commerce operator pays tax, as if it were the supplier. If the operator has no physical presence in the taxable territory, its representative pays. If there is no representative, the operator must appoint a person in the taxable territory to pay the tax. Section 24 makes registration compulsory for those who must pay tax under reverse charge or under section 9(5).

Key rules to remember

Charging rule, CGST: CGST is levied on intra-State supplies, on the value under section 15, at notified rates ≤ 20%; Paid by the taxable person. Alcohol for human consumption is excluded.
Charging rule, IGST: IGST is levied on inter-State supplies under section 5 of the IGST Act, at notified rates ≤ 40%; Import of goods: IGST is levied with customs duty under the Customs Tariff Act, 1975.
Reverse charge on notified supplies: Section 9(3): notified category of goods or services or both → recipient pays tax; Applies whether or not the supplier is registered. Only notified categories qualify.
Reverse charge on unregistered suppliers: Section 9(4): notified class of registered persons + specified supplies from an unregistered supplier → recipient pays tax; Both the class of recipient and the category of supply must be notified.
E-commerce operator liability: Section 9(5): notified services supplied through an operator → operator pays tax as if it were the supplier; No physical presence: the representative pays. If none, the operator appoints a person in the taxable territory.
Compulsory registration link: Section 24(iii) and (iv): persons liable under reverse charge or under section 9(5) must register; Registration is required even without crossing the normal turnover threshold in section 22.
Fuel exclusion: Petroleum crude, HSD, petrol, natural gas, ATF: tax only from a notified date (section 9(2)); Until notified, these are not taxed under CGST.

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

Use this order for any problem on levy, reverse charge or e-commerce operator liability.

1Identify what is supplied: goods, services or both. Check it is not alcohol for human consumption or a fuel not yet notified.
2Decide whether the supply is intra-State or inter-State. Intra-State attracts CGST under section 9 (with SGST or UTGST). Inter-State attracts IGST under section 5 of the IGST Act.
3Check whether any notification shifts liability: reverse charge on a category under section 9(3), a specified class of recipient buying from an unregistered supplier under section 9(4), or an e-commerce operator under section 9(5).
4If reverse charge applies, name the recipient as the person liable. State that all provisions of the Act apply to them as if they were the supplier.
5If an e-commerce operator is involved, check physical presence in the taxable territory. If none, look for a representative, else the appointed person.
6Mention the compulsory registration under section 24 where relevant.
7Apply value under section 15 and the notified rate, within the cap, and state the conclusion in one clear line.

Quickest way: Who pays? Three-gate check

When to use it: Short case questions that ask who is liable to pay tax.

Gate 1: Is there a notified reverse charge category, or a notified class of recipient with an unregistered supplier? If yes, the recipient pays.
Gate 2: Is the service notified under section 9(5) and supplied through an e-commerce operator? If yes, the operator pays.
Gate 3: Otherwise the supplier, as the taxable person, pays.
Write the section number next to each answer and add the registration point from section 24.

Common mistakes in Levy and Collection of Tax under Section 9

Treating all supplies from unregistered persons as reverse charge.
Students blur section 9(3) and section 9(4).
Fix: Reverse charge under section 9(4) applies only to a notified class of registered recipients and specified supplies. Check the notification before concluding.
Saying reverse charge applies automatically to any recipient.
The mechanism is learned as a concept, not as a notified power.
Fix: Section 9(3) and 9(4) operate only on notified categories. Always say 'if notified'.
Quoting the CGST cap of 20% for IGST.
The two caps look alike.
Fix: CGST rate cap is 20%. IGST rate cap is 40%. Section 9 and section 5 of the IGST Act respectively.
Forgetting that the recipient under reverse charge must register.
Students focus on tax payment, not compliance.
Fix: Cite section 24(iii) for reverse charge and 24(iv) for section 9(5) liability.
Ignoring the two provisos on foreign e-commerce operators.
They are short and read as detail.
Fix: Remember the order: operator, then representative in the taxable territory, then a person the operator appoints.
Assuming petrol and diesel attract GST today by default.
Section 9(1) reads as covering all goods.
Fix: Section 9(2) defers the levy on these five products to a notified date. Check whether the question states a notification.

Worked examples

Example 1

Sharma Traders, Jaipur (registered), buys a notified category of service from an unregistered provider in Rajasthan. The Government has notified this category under section 9(3). Who is liable to pay CGST, and what registration consequence follows?

Show the solution

The supply is intra-State, so CGST applies under section 9(1).
The category is notified under section 9(3), so tax is paid on reverse charge by the recipient.
The recipient, Sharma Traders, is treated as the person liable to pay tax, and all provisions of the Act apply to it as if it were the supplier.
Section 24(iii) requires persons liable to pay tax under reverse charge to be registered. Sharma Traders is already registered, so this is met.

Answer: Sharma Traders, the recipient, must pay the CGST on reverse charge under section 9(3). It must be registered under section 24(iii), and it already is.

Example 2

Foreign e-commerce operator Zeta Inc has no physical presence or representative in India. Through its app it supplies an intra-State service in Pune. The service is notified under section 9(5). Who pays the tax?

Show the solution

The service is notified under section 9(5), so the operator is liable as if it were the supplier.
Zeta Inc has no physical presence in the taxable territory. The first proviso makes a representative liable, but it has none.
Under the second proviso, where there is neither physical presence nor a representative, the operator must appoint a person in the taxable territory to pay tax.
That appointed person is liable to pay the tax.
Section 24(iv) requires registration for persons required to pay tax under section 9(5).

Answer: Zeta Inc must appoint a person in India, and that person is liable to pay the tax on the notified service. Registration is compulsory under section 24(iv).

Exam tips

Write the section number in every answer: 9(1) for charge, 9(3) and 9(4) for reverse charge, 9(5) for operators.
Use the provision, analysis, conclusion layout. State the rule, apply the facts, then give a one-line conclusion.
Always say 'notified by the Government on the recommendations of the Council' when applying reverse charge or operator liability.
In open-book papers, mark section 9, section 5 of the IGST Act and section 24 so you can quote them quickly.
Do not quote specific rates or notification entries unless the question gives them.

Practice questions from Supply under GST

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

What does section 9 of the CGST Act deal with?

It is the charging section for central tax on intra-State supplies. It sets the rate cap at 20%, excludes alcohol for human consumption, defers fuels to a notified date, and provides for reverse charge and e-commerce operator liability.

What is reverse charge under GST?

It is a mechanism where the recipient, not the supplier, pays tax. Section 9(3) covers notified categories of supply. Section 9(4) covers a notified class of registered persons buying specified supplies from an unregistered supplier.

Is registration compulsory for a person paying tax under reverse charge?

Yes. Section 24(iii) requires persons who must pay tax under reverse charge to be registered. Section 24(iv) does the same for persons who pay tax under section 9(5).

What is the difference between section 9 CGST and section 5 IGST?

Section 9 levies CGST on intra-State supplies with a rate cap of 20%. Section 5 of the IGST Act levies IGST on inter-State supplies with a cap of 40% and also covers imports of goods through the Customs Tariff Act.