Levy and Collection of Tax

ELEMENT

OPERATIVE CONTENT

Scope

Substantive charging framework — scope of supply, composite/mixed supplies, the charging section, composition scheme, exemptions, and FA 2024 power not to recover.

Sections covered

6 sections — Sec 7 (Scope of supply), Sec 8 (Composite/mixed supplies), Sec 9 (Levy/collection), Sec 10 (Composition), Sec 11 (Exemption), Sec 11A (FA 2024 power not to recover).

Commencement

1 July 2017 substantive commencement; Sec 11A inserted by FA 2024 effective 1-Nov-2024.

Major amendments

FA 2018 — sub-section restructuring s. 7 (cl. (1)(d) substituted with cl. (1)(aa) retrospectively); FA 2021 — Calcutta Club override (cl. (1)(aa) effective 1-Jul-2017); FA 2019 — s. 10 sub-s. (2A) service-provider composition; FA 2024 — s. 11A new insertion + s. 9(5) ECO restaurant amendments + general regularisation framework.

Operative Rules

Rules 3-7 (Composition); Rule 89(4)(C) (refund formula for inverted-duty); rate Notifications under s. 9, 11.

Key Notifications

Notification 1/2017-CT(R) (goods rate); 11/2017-CT(R) (services rate); 12/2017-CT(R) (exemption services); 13/2017-CT(R) (RCM); 17/2017-CT(R) (ECO s. 9(5)); 2/2017-CT (general goods exemption); 8/2017-CT (composition notified goods); 14/2019-CT (operative composition rates); various FA 2024 Notifications under s. 11A.

SEC

MARGINAL NOTE

OPERATIVE GIST

AMENDMENTS

KEY CASES

KEY NOTIFICATIONS / RULES

7

Scope of supply

Sub-s. (1) — supply includes sale, transfer, barter, exchange, licence, rental, lease, disposal — for consideration, in course/furtherance of business. Cl. (aa) — FA 2021 retrospective override on Calcutta Club mutuality (effective 1-Jul-2017). Sub-s. (1A) — Schedule II classification. Sub-s. (2) — Schedule III non-supply (services by employee to employer, court services, MLA/MP services, etc.). Sub-s. (3) — Government's notification power.

FA 2018 (sub-section restructuring); FA 2021 (cl. (1)(aa) retrospective)

Mohit Minerals (SC); Calcutta Club (SC) + FA 2021 override; Skill Lotto (SC); Circular 178/10/2022-GST (consideration framework)

Schedule II and III; Circular 178/10/2022-GST

8

Composite and mixed supplies

Clause (a) — composite supply: naturally bundled, principal supply identified, rate of principal supply applies to entire bundle. Clause (b) — mixed supply: not naturally bundled, highest-rate item rate applies to entire bundle.

—

Card Protection Plan (CJEU C-349/96) — naturally-bundled doctrine

Sector-specific AAR/AAAR rulings; CBIC Circulars on classification

9

Levy and collection — charging section

Sub-s. (1) — substantive CGST levy on intra-State supplies; alcohol carve-out; rate not exceeding 20%. Sub-s. (2) — petroleum deferred levy. Sub-s. (3) — RCM (notified categories — Notification 13/2017). Sub-s. (4) — RCM unregistered supplier (notified). Sub-s. (5) — ECO liability for notified services (FA 2021/2024 restaurant amendments).

FA 2021 — ECO restaurant; FA 2024 — sub-s. (5) refinements

Mohit Minerals (SC) — RCM ocean freight constitutional discipline; Skill Lotto (actionable claims); VKC Footsteps (legislative framework)

1/2017-CT(R) goods rate; 11/2017-CT(R) services rate; 13/2017-CT(R) RCM; 17/2017-CT(R) ECO; 4/2017-CT(R) RCM goods; 7/2019 (FA 2019 sub-s. (4) restriction)

10

Composition levy

Sub-s. (1) — original composition: turnover up to Rs. 1.5 cr (extendable Rs. 2 cr). Rates: 1% manufacturer / 2.5% restaurant / 0.5% other (CGST). Six eligibility conditions (sub-s. (2)). PAN-based discipline. Sub-s. (2A) — FA 2019 service-provider composition (up to Rs. 50 lakh, rate 3% CGST + SGST).

FA 2019 — sub-s. (2A) service-provider composition

Dilip Kumar (SC) — strict construction for concessions

8/2017-CT (notified goods bar); 14/2019-CT (operative rates); composition cap Notifications

11

Power to grant exemption

Sub-s. (1) — general public-interest exemption by notification on Council recommendation. Sub-s. (2) — special-order exemption in exceptional circumstances. Sub-s. (3) — clarificatory explanation within 1 year, retrospective effect.

—

Dilip Kumar (SC) — strict construction; Mohit Minerals constitutional framework

2/2017-CT (general goods exemption); 12/2017-CT(R) (general services exemption)

11A

Power not to recover (FA 2024)

Inserted by FA 2024 effective 1-Nov-2024. Non-obstante override — Government may, on Council recommendation, by notification, direct non-recovery of CGST where general practice prevailed regarding non-levy / short-levy. Pari materia CE Act s. 11C.

FA 2024 — new insertion

Safari Retreats v UoI (SC October 2024) — construction-ITC general-practice context; Mohit Minerals; Vatika

Post-Nov 2024 Notifications under s. 11A — operative evolution

3. KEY DOCTRINAL FRAMEWORKS

• Mohit Minerals v UoI (2022) 10 SCC 700 — RCM constitutional discipline; ocean-freight RCM on CIF importers struck down; recipient cannot be made liable for supplier outside framework.

• Calcutta Club v State of WB (2019) 19 SCC 107 — pre-GST mutuality doctrine. FA 2021 cl. (1)(aa) retrospective override extends GST to member-club supplies from 1-Jul-2017.

• Skill Lotto v UoI (2021) 15 SCC 667 — actionable claims (lottery, betting, gambling) constitutionally valid as 'goods' under Article 246A wide legislative competence.

• VKC Footsteps v UoI (2022) 2 SCC 603 — Rule 89(5) inverted-duty refund formula intra vires; legislative framework discretion.

• Card Protection Plan Ltd v C&E (CJEU Case C-349/96) — naturally-bundled test for composite supply; ancillary element 'means of better enjoying' principal supply.

• Dilip Kumar v UoI (2018) 9 SCC 1 — Constitution Bench — exemption notifications strictly construed; benefit of ambiguity to Revenue; burden on assessee.

• Safari Retreats v UoI (October 2024 SC) — construction-input ITC framework; FA 2024 retrospective amendment to s. 17(5)(d); s. 11A regularisation framework potential.

• Mohit Minerals + Vatika — constitutional architecture + prospective-operation framework for substantive amendments.

FA YEAR

SECTION

NATURE

EFFECTIVE

OPERATIVE IMPACT

FA 2018

Sec 7(1)

Restructuring sub-section; cl. (1)(d) → cl. (1A)

1 Feb 2019

Schedule II separated from substantive scope

FA 2019

Sec 9(4)

RCM unregistered supplier — notified categories only

1 Feb 2019

Operational reduction of RCM burden

FA 2019

Sec 10(2A)

Service-provider composition

1 April 2019

Up to Rs. 50 lakh; 3% CGST + SGST

FA 2021

Sec 7(1)(aa)

Calcutta Club retrospective override

1 Jul 2017 (retrospective)

Member-club supplies within GST

FA 2021

Sec 9(5)

ECO restaurant amendments — restaurant supplies through ECO

1 Jan 2022

Restaurant within ECO framework

FA 2024

Sec 11A

New insertion — power not to recover on general practice

1 Nov 2024

Regularisation framework for industry-wide non-levy

FA 2024

Sec 9(5)

Operational refinements

1 Apr 2025

ECO framework continues evolution

FORM GST

PURPOSE

STATUTORY ANCHOR

No specific FORM directly under Chapter III

Substantive levy framework operates through invoice (s. 31) + return (s. 39) framework

Sec 7-11A + Schedule II / III

FORM GST CMP-01 / 02 / 03 / 04 / 08 / GSTR-4

Composition forms — opt-in / stock declaration / quarterly statement / annual return

Sec 10 + Rules 3-7

EVENT / OBLIGATION

DUE DATE / TIMELINE

STATUTORY / RULE ANCHOR

CGST Act commencement

1 July 2017

Sec 1(3); Notification 9/2017-CT

Sec 11A insertion (FA 2024)

1 November 2024

FA 2024; Sec 11A

Composition scheme — first opt-in

30 September 2017 (initial)

Sec 10; CMP-02 framework

Composition annual return GSTR-4

30 April following end of FY

Sec 10 + Rule 62

CMP-08 quarterly statement

18th of month following quarter

Sec 10 + Rule 62

Schedule III — non-supply framework

Continuously operative from 1-Jul-2017

Sec 7(2)

Petroleum levy under s. 9(2)

To be notified by Government on Council recommendation

Pending Council decision

FORM GST

FREQUENCY

DUE DAY

APPLICABILITY

CMP-08 (Composition)

Quarterly

18th of month following quarter

Section 10 composition taxpayers

GSTR-4 (Composition annual)

Annual

30 April following end of FY

Section 10 composition taxpayers

GSTR-1 / GSTR-3B (Regular)

Monthly / Quarterly (QRMP)

11th / 20th / 22nd / 24th

Regular taxpayers — return framework engages Chapter IX

REFERENCE

DATE

SUBJECT

OPERATIVE IMPACT

Notification 1/2017-CT(R)

28 June 2017

Goods rate Notification — Schedule I to VII rate bands

Foundational rate framework

Notification 11/2017-CT(R)

28 June 2017

Services rate Notification

Services rate framework

Notification 12/2017-CT(R)

28 June 2017

General services exemption (74 entries)

Exemption framework foundational

Notification 13/2017-CT(R)

28 June 2017

Reverse Charge categories

RCM framework operational

Notification 17/2017-CT(R)

28 June 2017

ECO s. 9(5) categories

ECO liability framework

Notification 4/2017-CT(R)

28 June 2017

RCM on goods (limited categories)

Goods RCM framework

Notification 2/2017-CT

28 June 2017

General goods exemption

Goods exemption foundational

Notification 8/2017-CT

27 June 2017

Composition notified goods bar (ice cream, pan masala, tobacco)

Section 10 framework

Notification 14/2019-CT

7 March 2019

Composition rates operative

Section 10 operative rates

Circular 178/10/2022-GST

3 August 2022

Liquidated damages / forfeitures / consideration framework

Section 7 + cl. (31) consideration analysis

Notification 1/2017-CT(R)

28 June 2017

Rate notification — operative

Foundational

Circular 199/11/2023-GST

17 July 2023

HO-BO transactions framework

Pre-FA 2024 ISD context

SECTOR

KEY POINTERS RELATING TO THIS CHAPTER

Real Estate

Construction services — s. 11A potential regularisation for pre-Safari Retreats period. Notification 11/2017 rate-restructuring April 2019. Affordable / non-affordable housing rate framework.

Banking / Financial Services

Services rate framework + RCM on legal services + Notification 12/2017 exemption for specific services. Section 9 substantive levy comprehensive.

E-commerce

Section 9(5) ECO liability for restaurant + cab + accommodation services. FA 2021 / FA 2024 amendments. Notification 17/2017 framework. Coordinated with TCS s. 52.

Restaurants / Hospitality

Section 10 composition 5% framework + Section 9(5) ECO restaurant framework + Section 11 exemption-specific categories. Sector-comprehensive.

Healthcare

Notification 12/2017 healthcare-services exemption + clinical-establishment framework. ITC reversal under s. 17(2).

Manufacturing

Composite / mixed supply framework + works contract framework + composition for small manufacturers (1% rate).

Charitable / NGOs

Notification 12/2017 exemption for specific charitable activities + 12AA / 12AB Income-tax framework + comprehensive exemption analysis.

Educational services

Notification 12/2017 educational-services exemption + comprehensive carve-out framework.

Real Estate / RWAs

Section 7 + Schedule II framework + composition / non-composition framework for RWAs.

Petroleum / Energy

Petroleum carve-out under s. 9(2) — CE Act continues. CGST does not extend. Multi-framework analysis required.

Tobacco / Alcohol

Alcohol — Article 366(12A) carve-out — outside GST. Tobacco — GST + NCCD framework.

Online gaming / Lotteries

Section 7 + Skill Lotto framework — actionable claims within GST. October 2023 rate-rationalisation 28% on full face value.

10. PRACTITIONER QUICK-REFERENCE — COMPLIANCE + STRATEGIC POSTURE

• For every transaction, identify Schedule II classification (goods vs services), Schedule III non-supply analysis, and applicable rate Notification (1/2017 / 11/2017 / 12/2017).

• For composite vs mixed supply (Sec 8), apply Card Protection Plan naturally-bundled test rigorously — document principal-supply identification with multi-factor analysis.

• Section 9(3) RCM — Notification 13/2017 categories — legal services, GTA, security services, government supply, etc. Recipient self-invoice + RCM payment + ITC discipline.

• Section 9(5) ECO — restaurant + cab + accommodation through ECO — ECO pays GST. FA 2021 / 2024 amendments operational.

• For composition under Sec 10 — six eligibility conditions strictly construed (Dilip Kumar) — PAN-based discipline; ITC denial trade-off; B2C optimal.

• Section 11 exemption — strict construction; documentary trail of conditional compliance; ITC reversal under s. 17(2) coordination.

• Section 11A (FA 2024) — for industry-wide general-practice non-levy, monitor Council deliberations + Notifications for regularisation framework.

• Mohit Minerals constitutional framework — RCM on imported supplies / cross-border services — verify supplier framework before imposition.

• Calcutta Club + FA 2021 cl. (1)(aa) — member-club supplies retrospectively within GST from 1-Jul-2017.

• Skill Lotto framework — actionable claims (lottery, betting, gambling) constitutionally within GST.

• Time-of-supply under s. 12-14 (Chapter IV) coordinates with rate applicability under s. 9 — track rate-change events carefully.

• For litigation, Article 226 writ remedy + appellate framework under s. 107 / 112 coordinated.

THIS CHAPTER SECTION

OTHER CHAPTER / SECTION

NATURE OF COORDINATION

Sec 7 (Scope of supply)

Sec 9 (Levy); Sec 12-13 (Time of supply); Sec 15 (Value)

Substantive levy chain

Sec 8 (Composite/mixed)

Sec 9 (Rate); Sec 12-13 (Time of supply)

Bundled-supply rate framework

Sec 9 (Levy)

Sec 16 (ITC); Sec 31 (Invoice); Sec 39 (GSTR-3B); Sec 49 (Payment); Sec 50 (Interest)

Charging section operationalised through compliance framework

Sec 10 (Composition)

Sec 18(3) (Composition opt-in/out ITC); Sec 25(3) (Voluntary registration); Sec 44 (Annual return GSTR-4)

Composition-specific compliance

Sec 11 (Exemption)

Sec 17(2) (ITC reversal); Sec 54 (Refund — exempted persons UIN framework s. 55)

Exemption-ITC coordination

Sec 11A (FA 2024)

Sec 73, 74 (Recovery); s. 168A (Force majeure parallel framework)

Curative regularisation for past-period general practice

Sec 9(3) RCM

Sec 31(3)(f) (RCM self-invoice); Sec 16 (ITC on RCM)

RCM compliance chain

Sec 9(5) ECO

Sec 24(iv) (ECO compulsory registration); Sec 52 (TCS)

ECO comprehensive framework

SEC

TITLE

FILE NAME (CLICK / NAVIGATE)

PARA

SIZE

7

Section 7 - Scope of supply

Section 7 - Scope of supply.docx

88 para

44 KB

8

Section 8 - Composite and mixed supplies

Section 8 - Composite and mixed supplies.docx

173 para

44 KB

9

Section 9 - Levy and collection

Section 9 - Levy and collection.docx

179 para

45 KB

10

Section 10 - Composition levy

Section 10 - Composition levy.docx

173 para

45 KB

11

Section 11 - Power to grant exemption

Section 11 - Power to grant exemption.docx

173 para

44 KB

11A

Section 11A - Power not to recover

Section 11A - Power not to recover.docx

173 para

45 KB

FILE LOCATION DIRECTORY

All section files for this chapter are located at — C:\Users\caaru\OneDrive\Documents\Claude\Projects\GST Act\Chapter-by-Chapter\Chapter III - Levy and Collection of Tax\ Total 6 section files. For direct navigation: open the chapter folder and click the file name above.

13. KEY TAKEAWAYS — CHAPTER OVERVIEW

• Chapter III is the substantive heart of CGST — every taxable transaction engages Sec 7 scope + Sec 8 classification + Sec 9 charge + Sec 11 exemption framework.

• Section 9 charging framework — rate + RCM + ECO — operates within Article 246A constitutional discipline (Mohit Minerals).

• FA 2021 cl. (1)(aa) retrospective override of Calcutta Club mutuality extends GST to member-club supplies from 1-Jul-2017 — pre-2021 disputes affected.

• Section 11A (FA 2024) is the new operational lifeline for past-period regularisation where general industry practice prevailed — pre-Safari Retreats construction-ITC matters being addressed.

• Dilip Kumar Constitution Bench framework — exemptions + composition + concessions all strictly construed; benefit of ambiguity to Revenue.

• Card Protection Plan CJEU framework directly governs Sec 8 composite/mixed analysis — naturally-bundled test + principal-supply identification.

• Mohit Minerals constitutional discipline — RCM imposition (s. 9(3)) on cross-border supplies must satisfy structural framework; recipient cannot be made liable for outside-framework supplier.

• Sectoral evolution — restaurant ECO framework, online gaming framework, real-estate ITC framework, petroleum carve-out — all engage Chapter III centrally.

• Practitioner discipline — for any transaction, comprehensive levy analysis: classification + rate + value + time + ITC chain + RCM applicability + exemption analysis.