What does Section 32 say?

Section 32 of the CGST Act prohibits any person who is not registered under GST from collecting GST from customers. The section also prevents a registered person from collecting any amount as GST in excess of the tax actually payable on a supply. This provision safeguards customers from being charged taxes illegally and ensures that GST collected from the public reaches the government through authorized channels only.

The GST system is built on transparency and accountability. Therefore, only persons who hold a valid GST registration are permitted to charge GST on invoices. If an unregistered person collects GST from customers, it amounts to unauthorized collection of tax and may attract penalties under the Act. Similarly, even registered taxpayers must ensure that they collect only the correct amount of GST applicable to a transaction.

The objective of this section is to prevent tax evasion, protect consumers, and maintain the integrity of the GST framework. It ensures that customers pay only the legitimate amount of tax and are not misled by unauthorized tax charges.

Simple Example

A shopkeeper whose turnover is below the GST registration threshold is not registered under GST. If he issues a bill charging GST to customers, he violates Section 32. Likewise, if a registered supplier charges GST of ₹20,000 when only ₹18,000 is payable, the excess collection is not permitted.

Key Points

• Only registered persons can collect GST.
  • Unregistered persons cannot charge GST.
  • Excess GST collection is prohibited.
  • Protects customers from wrongful tax charges.
  • Ensures proper tax compliance.
  • Violations may attract penalties.

In One Line

Section 32 ensures that GST is collected only by authorized persons and only to the extent legally payable.