Levy and Collection of Central, State GST and IGST
Section 9 of CGST Act/SGST Act and Section 5 of IGST Act are the Charging Sections for the purposes of levy of GST. CGST and SGST shall be levied on all intra-state supplies of goods and/or services and IGST shall be levied on all inter-state supplies of goods and/or services respectively.
Table of Content
Let us discuss the statutory provisions of Section 9 of the CGST Act.
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.
Section 9 (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.
Section 9 (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.
Section 9 (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.
Section 9 (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. Pro- vided 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.
The tax shall be collected in such manner as may be prescribed and shall be paid by the taxable person. Any person who carries out a business at any place throughout India, who is already registered or needs to get registered under the GST Act can be called a taxable person. Additionally, a person who is engaged in any kind of economic activity, involving in trade and commerce will also be considered a taxable person.
Gst Rates Prescribed for Various Goods
Six rates of CGST have been notified broadly in six Schedules of rate notification for goods, which are 0.125%, 1.5%, 2.5%, 6%, 9% and 14%. SGST/ UTGST at the equivalent rate is also leviable. With regard to IGST, broadly six rates have been notified in six Schedules of rate notification for goods, which are 0.25%, 3%, 5%, 12%, 18% and 28%.
Gst Rates Prescribed for Various Services
Broadly, six rates of CGST have been notified for services, viz., 0.75%, 2.5%, 3.75%, 6%, 9 % and 14%. Equivalent rate of SGST/ UTGST will also be levied. For IGST, six rates have been notified for services, viz., 1.5%, 5%, 7.5%, 12%, 18% and 28%.
Exemption From GST
On the basis of the kind of goods or services supplied by a person, there are some exemptions for some people from GST registration. The persons who are exempted from GST registration are:
- Agriculturists
- Persons falling under Threshold Exemption Limit
- Persons supplying goods or services that are covered under Nil- Rated/Exempted category
- Persons supplying goods or services that are Non-Taxable/Non- GST
- Persons involved in activities other than supply of goods or services
- Persons supplying goods or services that are covered under the reverse charge
Composition Scheme
As studied in the previous chapter, in GST regime, tax is payable by every taxable person for which various provisions have been prescribed in the law.
However, for providing relief to small businesses making intra-state supplies, a simpler method of paying taxes is prescribed, known as composition levy.
The composition levy is basically an alternative method of levying tax. This method is designed for small taxpayers whose aggregate turnover is up to 75 lakhs ( 50 lakhs in case of few States). The objective of composition scheme is to bring simplicity and to reduce the compliance cost for the small taxpayers.
Moreover, it is optional and the eligible person opting to pay tax under this scheme can pay tax at a prescribed percentage of his turnover every quarter, instead of paying tax at a normal rate. Table shows the specified rate of composition levy.
| Category of Registered Person | Rate of Tax |
|---|---|
| Manufacturers, other than manufacturers of such goods as may be notified by the Government (Ice cream, Pan Masala, Tobacco products, etc.) | 2% (1% Central tax plus 1% State tax) of the turnover |
| Restaurant Services | 5% (2.5% Central tax plus 2.5% SGST) of the turnover |
| Traders or any other supplier eligible for composition levy | 1% (0.5% Central tax plus 0.5% State tax) of the turnover |
In the case of the following States, the limit of turnover is Rs 50 lakhs:
- Arunachal Pradesh
- Assam
- Manipur
- Meghalaya
- Mizoram
- Nagaland
- Sikkim
- Tripura
- Himachal Pradesh
Remission of Tax
The word ‘remission’ in general means the cancellation of any debt, penalty or charge. As per the Central Excise provisions, ‘remission of tax’ means to relieve a taxpayer from the obligation of paying the lia- ble tax on the goods which are lost or destroyed because of any natu- ral cause. The concept of remission of tax was proposed under Section 11 of the Draft Model GST Law in 2016. However, as per the CGST Act, 2017 (amended 2021), there is no mention of ‘remission of tax’.