Section 9 of CGST Act, 2017 : Section 9: Levy And Collection

Explanation using Example

Imagine a local business, 'A1 Electronics', that sells smartphones and accessories within the state of Maharashtra. When 'A1 Electronics' sells a smartphone to a customer within the state, it is an intra-State supply, and as per Section 9(1) of the CGST Act, 2017, they are required to charge CGST on the sale. The rate of CGST is determined by the government and does not exceed 20%. 'A1 Electronics' must collect this tax and pay it to the government.

Now, consider that 'A1 Electronics' also sells petroleum products. According to Section 9(2), CGST on petroleum products like motor spirit (petrol) will be applicable from a date notified by the government, which means they do not charge CGST on these products until such notification.

Additionally, if 'A1 Electronics' purchases cleaning services from an unregistered supplier, as per Section 9(4), 'A1 Electronics' would be responsible for paying CGST on these services under the reverse charge mechanism, meaning they pay the tax directly to the government instead of the unregistered supplier charging it.

Finally, if 'A1 Electronics' starts selling their products through an online marketplace, as per Section 9(5), the electronic commerce operator (the online marketplace) may be required to collect and pay CGST on the services it facilitates, unless 'A1 Electronics' sells through a foreign-based online platform without a physical presence in India, in which case the platform must appoint a representative to comply with tax obligations.