Section 32 of CGST Act - Prohibition of Unauthorised Collection of Tax
Section 32 of the Central Goods and Services Tax Act, 2017 restricts who may collect an amount as GST and requires a registered person to collect tax only in accordance with the Act and the rules.
Updated: 15 September 2026
Section 32 - Statutory provision
(1) A person who is not a registered person shall not collect, in respect of any supply of goods or services or both, any amount by way of tax under the CGST Act.
(2) A registered person shall not collect tax except in accordance with the CGST Act or the rules made under it.
The current text of Section 32 continues to contain these two core restrictions. For the authoritative statutory text, refer to the Central Goods and Services Tax Act, 2017 on India Code.
Meaning and scope of Section 32
Section 32 is a safeguard against unauthorised GST collection. It separates two situations. First, a person who is not registered under GST cannot collect an amount from a customer by representing it as tax under the CGST Act. Second, even a registered person has no unrestricted right to collect GST; the collection must be authorised by and consistent with the CGST Act and the applicable rules.
For this purpose, a registered person is a person registered under Section 25 of the CGST Act, other than a person having a Unique Identity Number. The registration framework should therefore be read with Section 25 - Procedure for Registration.
Practical effect for suppliers and recipients
- An unregistered supplier should not separately charge an amount to the recipient as GST under the CGST Act.
- A registered supplier should charge tax only where the levy, rate, place and time of supply, valuation, exemption and other applicable provisions permit the charge.
- The tax invoice requirements under Section 31 - Tax Invoice remain important when tax is lawfully chargeable.
- Where tax is charged on a supply for consideration, Section 33 requires the amount of tax forming part of the price to be prominently indicated in the prescribed documents.
What happens if tax is collected without authority?
Section 32 should be read with Section 76 of the CGST Act. Section 76 deals with an amount collected from another person as representing tax but not paid to the Government. The obligation can apply irrespective of whether the underlying supplies were taxable. The provision also contains the procedure for notice, determination and related consequences.
Depending on the facts, the penalty provisions in Section 122 may also become relevant. Section 122(1) includes specified defaults concerning collection of an amount as tax and failure to pay it to the Government beyond the prescribed period, including tax collected in contravention of the Act.
Section 32 compared with related provisions
| Provision | Subject | Connection with Section 32 |
|---|---|---|
| Section 31 | Tax invoice | Sets out when and how specified tax invoices or related documents are issued. |
| Section 32 | Unauthorised collection of tax | Restricts collection by unregistered persons and regulates collection by registered persons. |
| Section 33 | Tax to be indicated in documents | Requires the tax component to be prominently indicated where a taxable supply is made for consideration. |
| Section 76 | Tax collected but not paid to Government | Provides for payment to Government and adjudication where an amount represented as tax has been collected but not paid. |
| Section 122 | Penalty for certain offences | Specifies penalties for listed contraventions, including certain defaults involving collection and non-payment of tax. |
Example
If a supplier who is not registered under GST adds a separate line described as "CGST" to a bill and collects that amount from the customer, the collection would conflict with Section 32(1). A registered supplier must likewise ensure that any GST collected is supported by the Act and rules; registration alone does not authorise collection in every transaction.
Official GST resources
For statutory and administrative updates, consult the India Code, the Central Board of Indirect Taxes and Customs GST portal, and the GST common portal. Readers should verify notifications, rules and circulars relevant to the facts and date of a transaction.
Frequently asked questions
Can an unregistered person collect GST from a customer?
No. Section 32(1) prohibits a person who is not registered from collecting, in respect of a supply, any amount by way of tax under the CGST Act.
Can every registered person charge GST on every supply?
No. Section 32(2) permits a registered person to collect tax only in accordance with the CGST Act and the rules. Whether tax is chargeable depends on the applicable GST provisions governing the transaction.
What if an amount represented as GST is collected but not deposited?
Section 76 may require the amount collected as representing tax to be paid to the Government, and other statutory consequences may apply depending on the facts.