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CMA Intermediate · Direct and Indirect Taxation · Levy and Collection of CGST and IGST

Ganga Fuels sells motor spirit (petrol) within Uttar Pradesh. A tax advisor makes four statements about CGST on this supply. Which statement is correct as per Section 9(2) of the CGST Act, 2017?

Central tax on petrol is levied from a date the Government notifies on the Council's recommendation. Section 9(2) defers the levy for petroleum crude, high speed diesel, petrol, natural gas and aviation turbine fuel; they are not permanently excepted under Section 9(1).

  1. ACentral tax is levied from 1 July 2017 at 20 per cent
  2. BCentral tax is permanently excepted from levy under Section 9(1)
  3. CCentral tax on petrol is levied with effect from a date to be notified by the Government on the Council's recommendationCorrect
  4. DCentral tax on petrol is levied only on reverse charge basis

Explanation

Section 9(2) provides that central tax on petroleum crude, high speed diesel, petrol, natural gas and aviation turbine fuel is levied from a date notified on the Council's recommendation. Petrol is not in the permanent exception list in 9(1), so the 'permanent exception' option is wrong.

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