# GST Charging Section

## The two charging provisions

Section 9 of the CGST Act → levies CGST (and parallel SGST/UTGST is levied by the State/UT Act)
Section 5 of the IGST Act → levies IGST

## What is levied, on what, by whom

Type of supply	Tax(es) levied	Maximum rate
Intra-State supply	CGST + SGST/UTGST	Up to 20% each (so 40% combined cap)
Inter-State supply	IGST	Up to 40%

Value of supply is determined as per Section 15 (covered in 'Value of Supply').
Tax is collected and paid by the Taxable Person.

## Who is a 'Taxable Person'?

A person who is:

Registered in GST, OR
Liable to be registered in GST (covered in the 'Registration' chapter)

> Note: Both the rates above are statutory maximums. Actual rates are notified by the Government on recommendation of the GST Council and are typically lower (0%, 5%, 12%, 18%, 28% for most goods/services).

## Why two parallel charging sections

Because India follows a dual GST model, every intra-State transaction has a Central tax (CGST) and a State tax (SGST) component side-by-side; inter-State transactions are taxed integrally by the Centre (IGST) and the proceeds are then apportioned between Centre and the destination State.

Worked example

### Example 1

Q. A Delhi dealer sells goods worth ₹1,00,000 to a buyer in Delhi at an 18% combined rate. What taxes apply and under which section?

A. This is an intra-State supply. CGST @ 9% = ₹9,000 under Section 9 of the CGST Act, and SGST @ 9% = ₹9,000 under the Delhi SGST Act. Total invoice = ₹1,18,000.

### Example 2

Q. Same dealer sells goods worth ₹1,00,000 to a buyer in Mumbai at 18%. What tax applies?

A. This is an inter-State supply. IGST @ 18% = ₹18,000 under Section 5 of the IGST Act. Total invoice = ₹1,18,000. No CGST/SGST.

⚠️ Common exam mistakes

Quoting the rate caps as actual rates — 20%/40% are statutory ceilings, not the real rate.
Forgetting that the 20% under Section 9 is per limb (CGST and SGST each) — so the intra-State combined ceiling is effectively 40%.
Treating an unregistered person who is liable to register as 'not a taxable person' — liability to register itself makes them a taxable person.

Bare-Act text Section 9 (CGST) and Section 5 (IGST) · CGST Act, 2017 / IGST Act, 2017 · click to expand

Section 9(1) of the CGST Act: '... there shall be levied a tax called the central goods and services tax on all intra-State supplies of goods or services or both ... 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.'

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GST Charging Section [Section 9 CGST / Section 5 IGST]

Worked example

⚠️ Common exam mistakes