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CMA Intermediate · Direct and Indirect Taxation · Charge of Tax including Reverse Charge

Meera Enterprises, an unregistered person, issues a bill to a customer adding 'GST 18%' on a supply of goods. Under Section 32 of the CGST Act, 2017, what is the position?

The collection is not allowed. Section 32(1) states that a person who is not a registered person shall not collect, on any supply, any amount by way of tax under the Act. Customer consent or later deposit does not make it permissible.

  1. AAllowed if the amount is deposited later with the Government
  2. BAllowed if the customer agrees in writing
  3. CAllowed only for amounts above the registration threshold
  4. DNot allowed, as a person who is not a registered person shall not collect any amount by way of taxCorrect

Explanation

Section 32(1) prohibits a person who is not registered from collecting any amount by way of tax on a supply. Customer consent or later deposit does not change this prohibition, so the other options are incorrect.

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