GST Basics #7: Section 9 — The Charging Section, and What GST Is Actually Levied On

Section 9 is where GST is actually imposed. It sets what is taxed, on what value and at what rate — and in three important cases it shifts the liability to pay away from the seller altogether.

Everything in this series so far has been definitional. Section 9 is where the tax is actually imposed, and every GST question eventually comes back to it.

Section 9(1) is the charge itself. Central tax is levied on all intra-State supplies of goods or services, on the value determined under Section 15, at rates notified by the Government on the GST Council's recommendation — and the sub-section caps those rates at 20 per cent. State tax is levied in parallel under the SGST Act, which is why an intra-State supply carries CGST plus SGST. For inter-State supplies the equivalent charge sits in Section 5 of the IGST Act. Alcoholic liquor for human consumption is written out of the charge altogether and stays with the States.

The rate structure itself changed materially in 2025. Following the 56th GST Council meeting, Notification No. 09/2025-Central Tax (Rate) replaced the original rate notification with effect from 22 September 2025, collapsing the old four-slab system into nil, 5 and 18 per cent, with a 40 per cent rate for luxury and sin goods. The 12 and 28 per cent slabs are gone. Note that 40 per cent on an intra-State supply is 20 per cent CGST plus 20 per cent SGST — exactly the ceiling written into Section 9(1), which is why the rate could not have gone higher without amending the Act itself.

Section 9(2) explains a long-standing gap. Petroleum crude, high speed diesel, petrol, natural gas and aviation turbine fuel are inside GST in principle, but the levy takes effect only from a date the Government notifies on the Council's recommendation — and that date has never been notified. Until it is, those five continue under VAT and central excise, which is why the diesel in a transporter's tank carries no creditable GST.

Sub-sections (3) to (5) move who pays. Section 9(3) puts the tax on the recipient under reverse charge for notified categories — goods transport agency services, legal services from an advocate, sponsorship and a director's services are the ones most Chennai businesses meet. Section 9(4) applies reverse charge to purchases from unregistered suppliers, but only for classes the Government notifies, not across the board as was once proposed. Section 9(5) makes an e-commerce operator liable for notified services supplied through its platform — passenger transport, hotel accommodation, housekeeping and restaurant services — so the cab driver or the small restaurant does not pay, the platform does.

What this means for you: if you receive freight from a goods transport agency or engage an advocate, the GST is yours to pay under reverse charge, not your supplier's, and Section 49(4) means it must go out in cash rather than being set off against credit at the payment stage. Check whether any of your regular purchases fall in the Section 9(3) list before assuming your supplier is handling the tax.

The Act and the rate notifications are on the CBIC tax information portal at https://taxinformation.cbic.gov.in.

Next in this series: reverse charge in practice under Sections 9(3) and 9(4).

Topics:section 9 CGST ActGST charging sectionreverse charge GSTsection 9(3) RCMsection 9(5) e-commerceGST rate slabs 2025notification 09/2025petroleum GSTGST basics ChennaiTamil Nadu GST

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