Important Sections of CGST Act, 2017
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Understanding the Important Sections of the GST Act: A Practical Guide for Taxpayers & Professionals

When it comes to Goods and Services Tax (GST) in India, understanding the legal framework is crucial for every business, tax consultant, and GST practitioner. The GST Act is a comprehensive law that governs the levy, collection, and administration of GST in India. It includes the Central Goods and Services Tax (CGST) Act, the Integrated Goods and Services Tax (IGST) Act, and the Union Territory GST Act (UGST), among others.

This guide simplifies the most important sections of the GST Act, covering registration, invoicing, input tax credit (ITC), return filing, assessment, penalties, appeals, and more. Whether you’re preparing for a compliance audit or just looking to deepen your understanding of GST law, this blog post gives you a clear, structured overview of the key GST sections that matter most.

Important Sections of CGST Act, 2017

General Provisions

  • Section 1 – Short Title, Extent and Commencement
  • Section 2 – Definitions
  • Section 3 – Officers under this Act
  • Section 4 – Appointment of Officers
  • Section 5 – Powers of Officers
  • Section 6 – Authorisation of State/UT Officers

1. Levy & Collection of GST

Section 9 – Levy and Collection of CGST

  • Basic charging section for CGST.
  • Tax is levied on all intra-state supplies of goods or services.
  • Reverse charge mechanism also covered here.

Section 10 – Composition Levy

  • Optional scheme for small taxpayers (turnover up to ₹1.5 crore).
  • Lower tax rates (e.g., 1%, 5%) and less compliance burden.
  • No ITC allowed under this scheme.

2. Registration

Section 22 – Persons Liable for Registration

  • Mandatory GST registration if turnover exceeds the prescribed limit:
    • ₹40 lakh/₹20 lakh for goods
    • ₹20 lakh/₹10 lakh for services (depending on state)

Section 23 – Persons Not Liable for Registration

  • Exempts agriculturists, persons supplying exempted goods/services.

Section 24 – Compulsory Registration

  • Mandatory for inter-state suppliers, e-commerce operators, agents, etc., regardless of turnover.

3. Input Tax Credit (ITC)

Section 16 – Eligibility and Conditions

  • Must have tax invoice, receipt of goods/services, and tax paid.
  • Return filing is mandatory.
  • ITC must be claimed within prescribed time limits.

Section 17 – Blocked Credits & Apportionment

  • Lists situations where ITC is not allowed (motor vehicles, personal use, etc.).
  • Mixed-use credits must be apportioned.

Section 18 – ITC in Special Circumstances

  • New registrations, voluntary registrations, change in constitution, etc.

Section 20 – Input Service Distributor (ISD)

  • Mechanism for head office to distribute ITC to branches.

4. Invoicing and Documentation

Section 31 – Tax Invoice

  • When and how to issue invoices for goods/services.
  • Time limits specified for regular and advance supply.

Section 33 – Amount of Tax to be Indicated

  • Tax must be separately mentioned on invoice for transparency.

Section 34 – Credit/Debit Notes

  • When to issue a credit or debit note and how to reflect it in returns.

5. Returns Filing

Section 39 – GSTR-3B

  • Summary return to be filed monthly or quarterly (QRMP scheme).

Section 44 – Annual Return

  • GSTR-9 for regular taxpayers, GSTR-9A for composition taxpayers.

Section 45 – Final Return

  • To be filed within 3 months of cancellation of registration.

6. Payment of Tax

Section 49 – Payment Rules

  • How to make payment through electronic cash/credit ledger.

Section 50 – Interest on Delay

  • 18% interest on delayed payment of tax.
  • 24% if due to excess claim of ITC or reduction in output tax liability.

Section 52 – TCS by E-commerce Operators

  • E-commerce operators must collect TCS on net value of taxable supplies

7. Refunds

Section 54 – Refunds

  • Refund of excess tax, unutilized ITC, export refunds, etc.
  • Must be claimed within 2 years.

Section 55 – Special Refunds

  • Refund mechanism for UN bodies, embassies, etc.

8. Assessment & Audit

Section 59 – Self-Assessment

  • Every registered person must assess and file returns themselves.

Section 60–66 – Types of Assessment

  • 60: Provisional
  • 61: Scrutiny of returns
  • 62: Best judgment
  • 65: Audit by GST officers
  • 66: Special audit by CA/CMA

9. Demand & Recovery

Section 73 – Demand (No Fraud)

  • Tax short-paid or not paid due to non-fraudulent reasons.

Section 74 – Demand (Fraud)

  • Applicable where fraud, willful misstatement, or suppression of facts involved.

Section 75 – Procedure for Tax Determination

  • Common provisions for demand notices under Sections 73 & 74.

Section 78 – Initiation of Recovery

  • Recovery to begin after 3 months of serving demand notice.

Section 79 – Modes of Recovery

  • Attachment, garnishment, sale of goods, etc.

10. Inspection, Search, Seizure & Arrest

Section 67 – Inspection & Seizure

  • Permits GST officers to inspect premises, seize goods/documents.

Section 69 – Arrest

  • Arrest of person for specified GST offences (fraud, evasion, etc.).

Section 70 – Power to Summon

  • Summoning of persons for inquiry (equivalent to civil court powers).

11. Offences & Penalties

Section 122 – Penalty for Offences

  • Covers 21 types of offences (like fake invoicing, failure to register).

Section 123 to 127 – Other Penalties

  • Includes penalty for failure to furnish returns, incorrect information.

Section 132 – Prosecution

  • Criminal liability for major GST offences.

12. Appeals and Revisions

Section 107 – First Appeal

  • Appeal to Appellate Authority against any GST order.

Section 112 – Appeal to Tribunal

  • GST Appellate Tribunal (when operational).

Section 117–118 – Higher Appeals

  • Appeal to High Court/Supreme Court on legal issues.