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

Under Section 9(1) of the CGST Act, 2017, the Government may notify the rate of central tax on intra-State supplies. What is the maximum rate at which central tax can be notified?

The CGST Act caps the notified rate of central tax on intra-State supplies at twenty per cent. The Government may notify any rate up to that limit on the Council's recommendation. The forty per cent ceiling applies only to integrated tax on inter-State supplies.

  1. A14 per cent
  2. B20 per centCorrect
  3. C28 per cent
  4. D40 per cent

Explanation

Section 9(1) allows central tax at rates notified on the Council's recommendation, not exceeding twenty per cent. The 40 per cent ceiling is the IGST limit under Section 5(1) of the IGST Act, so it is wrong for CGST.

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