Section 5 IGST Act: Levy and Collection of Integrated Tax
Section 5 of the Integrated Goods and Services Tax Act, 2017 is the principal charging provision for integrated GST on inter-State supplies. It also deals with imported goods, specified petroleum products, reverse charge and specified services supplied through electronic commerce operators.
Updated: 27 September 2026 | Act No. 13 of 2017
Current text of Section 5 - Levy and collection
(1) Subject to the provisions of sub-section (2), there shall be levied a tax called the integrated goods and services tax on all inter-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined under section 15 of the Central Goods and Services Tax Act and at such rates, not exceeding forty 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:
Provided that the integrated tax on goods other than the goods as may be notified by the Government on the recommendations of the Council imported into India shall be levied and collected in accordance with the provisions of section 3 of the Customs Tariff Act, 1975 on the value as determined under the said Act at the point when duties of customs are levied on the said goods under section 12 of the Customs Act, 1962.
(2) The integrated tax on the supply of petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel shall be levied with effect from such date as may be notified by the Government on the recommendations of the Council.
(3) The Government may, on the recommendations of the Council, by notification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.
(4) The Government may, on the recommendations of the Council, by notification, specify a class of registered persons who shall, in respect of supply of specified categories of goods or services or both received from an unregistered supplier, pay the tax on reverse charge basis as the recipient of such supply of goods or services or both, and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to such supply of goods or services or both.
(5) The Government may, on the recommendations of the Council, by notification, specify categories of services, the tax on inter-State supplies of which shall be paid by the electronic commerce operator if such services are supplied through it, and all the provisions of this Act shall apply to such electronic commerce operator as if he is the supplier liable for paying the tax in relation to the supply of such services:
Provided that where an electronic commerce operator does not have a physical presence in the taxable territory, any person representing such electronic commerce operator for any purpose in the taxable territory shall be liable to pay tax:
Provided further that where an electronic commerce operator does not have a physical presence in the taxable territory and also does not have a representative in the said territory, such electronic commerce operator shall appoint a person in the taxable territory for the purpose of paying tax and such person shall be liable to pay tax.
Meaning and scope of Section 5
Section 5 is the charging section of the IGST Act. Its operation depends first on whether the transaction is an inter-State supply. The nature of supply is principally determined under sections 7 and 8 of the IGST Act, read with the place-of-supply provisions. Once a taxable supply is an inter-State supply, section 5 provides the legal basis for levy of integrated tax, subject to exclusions and special rules contained in the Act.
The reference to section 15 of the CGST Act means that the value on which IGST is calculated is determined under the GST valuation provision. Section 15 broadly starts with transaction value where supplier and recipient are not related and price is the sole consideration, subject to the inclusions, exclusions and valuation rules prescribed under GST law.
Sub-section wise explanation
Section 5(1): General levy
IGST applies to inter-State supplies of goods or services or both, except alcoholic liquor for human consumption. The provision sets a maximum statutory rate of 40%; operative rates are fixed through notifications on the recommendations of the GST Council.
Imports of goods
For imported goods covered by the proviso, integrated tax is levied and collected through section 3 of the Customs Tariff Act, 1975 when customs duties are levied under section 12 of the Customs Act, 1962.
Section 5(2): Petroleum products
IGST on petroleum crude, high speed diesel, petrol, natural gas and aviation turbine fuel becomes leviable from a date notified by the Government on the recommendations of the GST Council.
Section 5(3): Reverse charge
The Government may notify specified supplies for which the recipient, rather than the supplier, is liable to pay integrated tax under the reverse charge mechanism.
Section 5(4): Specified unregistered supplies
This is not a blanket reverse charge on every purchase from an unregistered supplier. It authorises notification of a class of registered persons and specified categories of supplies received from unregistered suppliers for reverse-charge liability.
Section 5(5): E-commerce operators
For notified categories of services supplied through an electronic commerce operator, the operator is treated as the person liable to pay IGST. Special responsibility is imposed where the operator has no physical presence in the taxable territory.
Important amendments to Section 5
The proviso to section 5(1) relating to imported goods was amended with effect from 1 October 2023 by inserting the words that permit the Government, on the recommendations of the Council, to notify goods outside the ordinary import-IGST collection mechanism described in that proviso. The current statutory text above reflects that amendment.
Related IGST provisions
Section 5 should be read with Section 2 - Definitions, Section 7 - Inter-State supply, Section 8 - Intra-State supply, the applicable place-of-supply provisions, and Section 20 - Application of CGST Act provisions.
This page explains the statutory provision for general legal information. Rate, exemption and reverse-charge notifications may be amended from time to time and should be checked for the relevant supply and tax period.