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CS Executive · Tax Laws and Practice · Levy and Collection of GST

Under the CGST Act, 2017, the central tax is levied on which kind of supplies, and at what maximum rate can the Government notify it on the Council's recommendation?

Central tax under the CGST Act is levied on all intra-State supplies of goods or services or both, at rates the Government notifies on the Council's recommendation, not exceeding twenty per cent. Inter-State supplies attract IGST, which has a different ceiling.

  1. AAll intra-State supplies of goods or services or both, at rates not exceeding twenty per centCorrect
  2. BAll inter-State supplies of goods or services or both, at rates not exceeding twenty per cent
  3. CAll intra-State supplies of goods or services or both, at rates not exceeding forty per cent
  4. DOnly intra-State supplies of services, at rates not exceeding twenty per cent

Explanation

Section 9(1) of the CGST Act levies central tax on all intra-State supplies of goods or services or both, at notified rates not exceeding 20%. Inter-State supplies attract IGST, whose ceiling is 40%, so the options naming inter-State supplies or a 40% ceiling confuse the two Acts.

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