Levy and Collection | Section 9 | CGST Act 2017

SECTION 9- Levy and Collection – In my previous articles we have discussed Section 7 and 8 now we will discuss today Section 9 very important section of CGST ACT 2017 in simplified manner.

Section 9 is the charging provision of the CGST Act. It provides the maximum rate of tax that can be levied on supplies leviable to tax under this law, the manner of collection of tax and the person responsible for paying such tax.

Section 9(1)- Subject to the provisions of sub-section (2), there shall be levied a tax called the central goods and services tax 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 under section 15 and at such rates, not exceeding twenty per cent., as may be notified by the Government on the recommendations of the Council and collected in such manner as may be prescribed and shall be paid by the taxable person.

(2) The central tax 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 on the recommendations of the Council.

Analysis-   Taxable supply – We all know a taxable supply refers to any supply of goods or services or both, which qualifies as a supply in terms of Section 7 except those supplies that have been notified to be nil rated or exempted.

The provisions imposing GST are phrased in such a manner so as to exclude the supply of alcoholic liquor for human consumption from the scope of levy itself. Certain goods on which levy has been deferred-

√ Petroleum Crude

√ High Speed Diesel

√ Motor Spirit ( Petrol)

√ Natural Gas and

√ Aviation turbine fuel

√ Tax payable- The nature of tax would depend upon the nature of supply, viz., inter-State supplies will be liable to IGST and intra-State supplies will be liable to CGST and SGST/UTGST .

√ Tax shall be payable by a ‘taxable person -The tax shall be payable by a ‘taxable person’ i.e., a person who is liable to obtain registration, or a person who has obtained registration.

√ Rate of tax- The rate of tax will be applicable as specified in the Notification No. 1/2017- Central Tax (Rate) for goods and Notification No. 11/2017- Central Tax (Rate) for services issued in this regard and read with other Rate Notifications which may be issued to partially exempt any other goods or services from payment of tax. The rates of tax contained in these notifications cannot exceed 20% under each limb (i.e., 20% under CGST Law and 20% under SGST), as amended from time to time.

√ Taxable Value- The rate of tax so notified will apply on the value of supply as determined under Section 15.

(3)  The Government may, on the recommendations of the Council, by notification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both 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

(4) The Government may, on the recommendations of the Council, by notification, specify a class of registered persons who shall, in respect of supply of specified categories of goods or services or both received from an unregistered supplier, pay the tax on reverse charge basis as the recipient of such supply of goods or services or both, 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 of goods or services or both.

(5) The Government may, on the recommendations of the Council, by notification, specify categories of services the tax on intra-State supplies of 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:

Provided 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:

Provided further that 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.

Analysis-  

Under the GST law, the person liable to pay the tax levied on a supply under the Statute would be one of the following

> The supplier, in terms of Section 9(1)–Referred to as forward charge

> The recipient – Referred to as tax under reverse charge mechanism

I. Notified supplies under Section 9(3): The supply of goods or services is notified as a supply liable to tax in the hands of the recipient vide Notification No. 4/2017-Central Tax (Rate) in case of goods and Notification No. 13/ 2017-Central Tax (Rate) in case of services, as amended from time to time.

II. Supplies received from unregistered persons under Section 9(4) -The supply is an inward supply of goods and / or services effected by a registered person from an unregistered supplier. In this regard, it may be noted that the levy under this clause applies (as amended by CGST Amendment Act) only in respect of (a) ‘class of registered persons’ and (b) ‘categories of goods or services’, by a notification. (Notification No. 07/2019-Central Tax (Rate)

III. No partial reverse charge will be applicable under GST. 100% tax will be paid by the recipient if reverse charge mechanism applies.

IV. All taxpayers required to pay tax under reverse charge have to mandatorily obtain registration and the threshold exemption is not applicable on them.

V. Payment of taxes under Reverse Charge cannot be made with utilisation of Input Tax Credit and has to be made in Cash.

VI. The recipient can take the credit of tax paid on inward supplies liable to reverse charge once the recipient makes payment of tax in cash.

VII. The e-commerce operator, in terms of Section 9(5) -The Government is empowered to notify categories of services wherein the person responsible for payment of taxes would nether be the supplier nor the recipient of supply, but the e-commerce operator through which the supply is effected.

It is important to note that, in case of such supplies, the e-commerce operator is neither the supplier nor does it receive the services. The e-commerce operator is merely the person who person who owns, operates or manages digital or electronic facility or platform for e-commerce purposes.  Now list of those services vide Notification No. 17/2017-Central Tax (Rate) as follows-

Services by way of transportation of passengers by a radio-taxi, motor cab, maxi cab and motor cycle, etc.); accommodation in hotels, inns, guest houses, clubs, campsites; services by way of housekeeping, such as plumbing, carpeting etc. Now make one thing clear e-commerce operator is not liable to pay tax on reverse charge basis but only liability to pay tax on supply is placed on e-commerce operator “as if” the e-commerce operator were the “supplier liable to tax”. He steps into shoes of e-commerce operator for the limited purpose of discharging his liability

TEST FOR READERS-  Now let us check how much you have understand my analysis- For Instance – A , Registered taxpayer purchases goods from unregistered person ‘B’  Is A Liable to pay tax under reverse charge mechanism u/s 9(4) ??

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