Section 9 - Levy and collection of CGST
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Para |
Topics |
Section/Rules/N/C/O |
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Levy and Collection of GST |
NA |
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Levy of CGST on Intra State supplies at notified rate on value determined u/s 15 |
Section 9(1) |
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Non-GST Supply |
Section 9(1) |
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GST Rates |
Section 9(1) |
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Non-applicability of GST on petroleum, diesel, gas etc till notified date |
Section 9(2) |
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Levy under RCM [Reverse Charge Mechanism] |
NA |
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RCM on specified supplies received from any person |
Section 9(3) |
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RCM on specified supplies received by specified RP from URP |
Section 9(4) |
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Specified Services on which ECO shall pay GST |
NA |
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Meaning of ECO |
Section 2(45) |
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Payment of GST by ECO on specified services supplied through it |
Section 9(5) |
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If ECO does not have physical presence in taxable territory |
1st Proviso to Section 9(5) |
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If ECO does not have physical presence and no representative in taxable territory |
2nd Proviso to Section 9(5) |
9.0 Levy and Collection of GST
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The provisions relating to levy and collection of CGST and IGST are contained in section 9 of the CGST Act, 2017 and section 5 of the IGST Act, 2017, respectively. |
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Section 9 of the CGST Act and Section 5 of the IGST Act are charging sections |
9.1 Levy of CGST on Intra State supplies at notified rate on value determined u/s 15
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Section 9(1) Subject to the provisions of sub-section (2), there shall be levied Central goods and services tax (CGST) on all intra-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined u/s 15 and at such rates, not exceeding 20%, as may be notified by the Government and collected in such manner as may be prescribed and shall be paid by the taxable person. |
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1 |
Levy of Central Tax (CGST) on Intra State Supply CGST (Central Tax) + SGST/UGST shall be levied on all intra-State supplies of goods or services or both. |
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2 |
Levy of IGST on Inter-State Supply IGST shall be levied on all inter-State supplies of goods or services or both. Refer section 5 of IGST Act for levy of IGST on inter-state supply. |
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Refer section 7 of IGST Act for meaning of “Intra-state supply” |
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Refer section 8 of IGST Act for meaning of “Inter-state supply” |
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Taxable Value for levy of GST GST shall be levied on value to be determined as per section 15. |
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4 |
GST shall be paid by taxable person A supply to attract GST should be made by a taxable person. Hence, a supply between two non-taxable persons does not constitute taxable supply under GST. |
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Refer section 2(107) for meaning of “Taxable person” |
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9.1.1 Non-GST Supply
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Supply of alcoholic liquor for human consumption is outside the purview of GST Laws. |
9.1.2 GST Rates
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GST shall be levied at such rates, not exceeding 20%, as may be notified by the Government. IGST Rate = CGST Rate + SGST/UTGST Rate |
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CGST Rates presently notified are 0%, 0.125%, 0.75% 1.5%, 2.5%, 6%, 9% and 14% |
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For updated list of CGST Rates on supply of goods and services, click here |
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Maximum rate of CGST can be 20%. Maximum rate of IGST can be 40%. |
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9.2 Non-applicability of GST on petroleum, diesel, gas etc till notified date
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Section 9(2) CGST on the supply of petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel shall be levied with effect from such date as may be notified by the Government. |
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Govt. has not yet notified the date for levy of CGST on above item. |
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9.3 Levy under RCM [Reverse Charge Mechanism]
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Concept of RCM Generally, the supplier of goods or services is liable to pay GST. However, under RCM, the liability to pay GST is cast on the recipient of the goods or services. |
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Under RCM, only the compliance requirements, [i.e. to obtain registration under GST, deposit the tax with the Government, filing returns, etc.] have been shifted from supplier to recipient. The burden to pay GST ultimately lies on the recipient only. |
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Refer section 2(98) for meaning of “Reverse Charge” |
9.3.1 RCM on specified supplies received from any person
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Section 9(3) The Government may, by notification, specify categories of supplies, the tax on which shall be paid on reverse charge basis by the recipient of such supplies and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to such supplies. |
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Similar provisions are contained u/s 5(3) of the IGST Act for Inter State Supply. |
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For updated list of specified supply of goods and services on which RCM is applicable, click here |
9.3.2 RCM on specified supplies received by specified RP from URP
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The Government may, by notification, specify a class of RPs who shall in respect of supply of specified categories received from an URP pay the tax on RCB as the recipient of such supplies and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to such supply] |
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Similar provisions are contained u/s 5(4) of the IGST Act for Inter State Supply. |
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Specified RP who receives specified supplies from URP shall pay gst under RCM u/s 9(4). |
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For updated list of specified supplies from URP on which RCM is applicable, click here |
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9.4 Specified Services on which ECO shall pay GST
9.4.1 Meaning of ECO
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Meaning of “electronic commerce operator” [Section 2(45)] means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce. |
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Ex |
Amazon, Flipkart, Urban clap etc |
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Sometimes, ECO itself supplies the goods or services displayed on its electronic portal. However, many a times, the products/services displayed on the electronic portal are actually supplied by some other person to the consumer. When a consumer places an order for a particular product/ service on this electronic portal, the actual supplier supplies the selected product/ service to the consumer. The price/ consideration for the product/ service is collected by the ECO from the consumer and passed on to the actual supplier after the deduction of commission by the ECO. |
9.4.2 Payment of GST by ECO on specified services supplied through it
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Section 9(5) The Government may, by notification, specify categories of services, tax on which shall be paid by the ECO if such services are supplied through it, and all the provisions of this Act shall apply to such electronic commerce operator as if he is the supplier liable for paying the tax in relation to the supply of such services: |
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Ex |
Mr A provides cleaning services to customer (Mr D) through Urban clap portal. In such cases, GST on services provided to Mr D shall be paid by Urban clap. |
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Hence, ECO shall pay GST on specified services if such services are supplied through it. For updated list of notified supplies on which ECO shall pay GST, click here |
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9.4.3 If ECO does not have physical presence in taxable territory, then ECO’s representative shall be liable to pay GST
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1st Proviso to Section 9(5) where an ECO does not have a physical presence in the taxable territory, any person representing such ECO for any purpose in the taxable territory shall be liable to pay tax: |
9.4.4 If ECO does not have physical presence and no representative in taxable territory
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2nd Proviso to Section 9(5) where an ECO does not have a physical presence in the taxable territory and also he does not have a representative in the said territory, such ECO shall appoint a person in the taxable territory for the purpose of paying tax and such person shall be liable to pay tax. |
Question & Answer
9.1 Levy of CGST on Intra State supplies at notified rate on value determined u/s 15
Question-1
Which of the following taxes levied on intra-State supply?
(a) CGST; (b) SGST/UTGST; (c) Both (a) and (b); (d) IGST.
Question-2
IGST is levied on
(a) Inter-State supplies; (b) Intra-State Supplies; (c) Both (a) and (b); (d) None of the above.
9.1.2 GST Rates
Question-1
What is the maximum rate of CGST prescribed under CGST Act?
(a) 20% (b) 28% (c) 24% (d) 40%.
Question-2
The maximum rate of IGST can be:
(a) 20% (b) 30% (c) 40% (d) None of the above.
9.2 Non-applicability of GST on petroleum, diesel, gas etc till notified date
Question-1
On supply of which of the following items, GST shall be levied with effect from such date as may be notified by the Government on the recommendations of the Council:
(a) Petroleum crude
(b) Alcoholic liquor for human consumption
(c) Both (a) and (b)
(d) None of the above.
Question-2 [ICSI-E-J22-57-1]
Unless and until notified by the Central Government on the recommendation of the Council, CGST or IGST or UTGST shall not be levied on the following supplies :
(i) Petroleum Crude and High Speed Diesel
(ii) Motor Spirit
(iii) Natural Gas and Aviation Turbine Fuel
(A) (i) only (B) (i) & (iii) (C) (ii) & (iii) (D) (i), (ii) and (iii)
Quesiton-3 [ICSI-E-J21-52-1]
Which of the following product is liable for Central Excise duty and not liable for GST ?
(A) Aviation Turbine Fuel (B) Jewellery (C) Floor Tiles (D) Iron and Steel
9.3.2 RCM on specified supplies received by specified RP from URP
Question-1 [ICMAI-D19-F-1(iv)-2]
What are the supplies on which reverse charge mechanism would apply?
(A) Notified categories of goods or services or both u/s 9(3).
(B) Inward supply of goods or services or both from an unregistered dealer u/s 9(4).
(C) Both of (A) and (B)
(D) None of the above.
Question-2 [ICMAI-D19-I-1(a)(ii)-1]
Reverse Charge Mechanism shall apply
(A) only in respect of services
(B) only in respect of goods
(C) both in respect of goods or services
(D) only in respect of inward supplies from unregistered persons.
Question-3 [ICSI-E-D18-O-75-1]
The exception to the general rule that ‘‘normally, the supplier of goods and services is liable to pay tax on supply, even if he does not collect from his customer i.e. recipient of supply of goods or services’’ shall be applicable where there are:
(A) supply from an unregistered dealer to registered dealer
(B) specified services through an e-commerce operator
(C) both (A) and (B)
(D) none of the above
9.4.2 Payment of GST by ECO on specified services supplied through it
Question-1 [ICAI-F-SM-Ch3-3]
Suvidha Technologies is in the business of development of e-commerce platforms for various customers. Chennai Creations obtained the ownership rights of an e-commerce platform developed by Suvidha Technologies by paying a specified amount against ownership rights of said platform. Chennai Creations also entered into an annual maintenance contract with Suvidha Technologies for technical maintenance of the said platform. Chennai Creations supplies its own goods and services through the said platform to ultimate customers Examine who is the e-commerce operator in the given case as per the provisions of the GST law.
Answer
As per section 2(44), electronic commerce means the supply of goods or services or both, including digital products over digital or electronic network. Further, as per section 2(45), electronic commerce operator means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce.
In the given transaction, the e-commerce platform is developed by Suvidha Technologies. However, the ownership of the electronic platform is sold by Suvidha Technologies to Chennai Creations. Thus, Chennai Creations is the owner of the e-commerce platform and is also operating/managing the said platform for supply of its own goods and services.
In view of the definition of e-commerce operator, it is Chennai Creations which owns, operates or manages digital or electronic facility or platform for electronic commerce Suvidha Technologies is merely providing the annual maintenance services for the electronic platform, but the ownership rights lie with Chennai Creations. Thus, Suvidha Technologies cannot be termed as electronic commerce operator in the given case and Chennai Creations is the e-commerce operator.
Question-2 [ICAI-F-SM-Ch3-11]
Harishchandra of New Delhi makes a request for a motor cab to "Super ride" for travelling from New Delhi to Gurgaon (Haryana). After Harishchandra pays the cab charges his debit card, he gets details of the driver - Jorawar Singh and the cab's registration number.
"Super ride" is a mobile application owned and managed by Perry India Ltd. located in India. The application "Super ride" facilitates a potential customer to connect with the persons providing cab service under the brand name of "Super ride".
Perry India Ltd. claims that cab service is provided by Jorawar Singh and hence, he is liable to pay GST. With reference to the provisions of IGST Act, 2017, determine who is the person liable to pay GST in this case?
Answer
Section 5(5) of the IGST Act, 2017 provides that tax on inter-State supplies of specified services notified by Government shall be paid by the electronic commerce operator (ECO) located in taxable territory if such services are supplied through it. Services by way of transportation of passengers by a motor cab supplied through ECO is one of the notified service. Electronic commerce operator (ECO) means any person who owns, operates or manages digital or electronic facility or platform for supply of goods or services or both [Section 2(45)].
Since Perry India Ltd. owns and manages a mobile application in the name of “Super ride”, to facilitate supply of passenger transportation service in motor cabs over a digital network, it is an ECO. Thus, Perry India Ltd., an ECO located in India, is liable to pay GST in the given case.
Question-3 [ICSI-P-D21-1b-5]
Sanjay of New Delhi made a request for a Motor cab to “Destiny Rides” for travelling from New Delhi to Jaipur (Rajasthan). Sanjay after paying the cab charges using his debit card, get details of the drivers Joga Singh and the cab’s registration number
“Destiny Rides” is a mobile application owned and managed by “D.T. Ltd”, located in India. The application “destiny Rides” facilities a potential customer to connect with the persons providing cab service under the brand name of “Destiny Rides”.
D.T. Ltd. Claims that cab service is provided by Joga Singh and hence, he is liable to pay GST under the provisions of goods and service tax laws and Act.
You are required in the context of IGST Act, 2017 to determine who is liable to pay GST in this case would your answer be different, if D.T. Ltd, is located in New York (USA)
Answer
As per section 5(5) of the Integrated Goods and Services Tax Act, 2017, the Government may, on the recommendations of the Council, by notification, specify categories of services, the tax on inter-state supplies which shall be paid by the electronic commerce operator if such services are supplied through it, and all the provisions of this Act shall apply to such electronic commerce operator as if he is the supplier liable for paying the tax in relation to the supply of such services.
As per section 2(45) of the Central Goods and Services Tax Act, 2017, “Electronic commerce operator" (ECO) means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce.
The Central Government has notified services by way of transportation of passengers by a radio-taxi, motorcab, maxicab and motor cycle and the tax on inter-state supplies which shall be paid by the electronic commerce operator.
Thus, in the above case D.T. Ltd., is liable to pay GST in respect of supply of the said service. Thus, the contention of D.T. Ltd. that Joga Singh should pay GST on the same as he is provider of service is not correct.
Further, proviso to section 5(5) of the Integrated Goods and Services Tax Act, 2017, provides that where an electronic commerce operator does not have a physical presence in the taxable territory, any person representing such electronic commerce operator for any purpose in the taxable territory shall be liable to pay tax.
Where an electronic commerce operator does not have a physical presence in the taxable territory and also he does not have a representative in the said territory, such electronic commerce operator shall appoint a person in the taxable territory for the purpose of paying tax and such person shall be liable to pay tax.
Thus, even if D.T. Ltd, is located in New York (USA) a non-taxable territory its liability to pay GST will not be extinguished. The representative of D.T. Ltd or the person appointed by D.T. Ltd will be required to discharge the GST liability on behalf of D.T. Ltd.
[1] Sub-section substituted by Section 4 of The CGST(A) Act, 2018 dt. 29-08-2018 and made effective from 01-02-2019 by Notification No. 02/2019-Central Tax dt. 29-01-2019.
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(4) The central tax in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both |
GST Gyaan | https://gstgyaan.in | CA Rajesh Ritolia - 9350171263