Section 32 – Prohibition of Unauthorised Collection of Tax
Section 32 of CGST Act, 2017 – Prohibition of Unauthorised Collection of Tax
Updated on: February 2026 (as applicable till date)
Prepared by: Yours Tax Consultant
1. Bare Act – Section 32
Section 32:
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 this Act.
Further, no registered person shall collect tax except in accordance with the provisions of this Act or the rules made thereunder.
2. Objective of Section 32
Section 32 aims to:
- Prevent unauthorised collection of GST
- Protect recipients from illegal tax collection
- Ensure that only eligible persons collect GST
This section enforces the basic principle that tax can be collected only by authority of law.
3. Prohibition on Unregistered Persons
An unregistered person:
- Cannot charge GST on any invoice
- Cannot collect any amount as CGST, SGST or IGST
Even if:
- GST is otherwise applicable on supply, or
- Recipient agrees to pay GST
collection of tax by an unregistered person is illegal.
4. Prohibition on Registered Persons
A registered person:
- Can collect tax only as per GST law
- Cannot collect tax in excess of applicable rate
- Cannot collect tax on exempt supplies
Examples of violation:
- Charging GST under composition scheme
- Charging GST on exempt goods or services
- Charging GST without issuing proper tax invoice
5. Section 32 Read with Section 31
Section 32 must be read with:
Tax can be collected only through:
- A valid tax invoice
- Issued by a registered person
6. Consequences of Violation
If tax is collected in contravention of Section 32:
- Amount collected is liable to be paid to the Government
- Penalty proceedings may be initiated
- Interest may also be applicable
Relevant provisions include:
- Section 73 / Section 74 – Demand and recovery
- Section 76 – Tax collected but not paid to Government
7. Common Practical Situations
- Unregistered persons issuing “GST included” invoices
- Composition dealers charging GST separately
- Charging GST after cancellation of registration
- Charging tax at higher rate due to ignorance
8. Section 32 vs Section 9
Section 9 authorises levy of tax, whereas Section 32 regulates:
- Who can collect tax
- How tax can be collected
Even if tax is leviable under Section 9, collection must comply with Section 32.
9. Related Provisions
- Section 9 – Levy and collection of tax
- Section 31 – Tax Invoice
- Section 76 – Tax collected but not paid
10. Professional Tip
Never collect GST unless you are properly registered and authorised to do so. Wrong collection is more dangerous than non-collection, as it leads to recovery, interest and penalty.
Disclaimer: This article is prepared based on the CGST Act, CGST Rules, notifications and prevailing legal position as applicable till date. Future amendments or judicial pronouncements may require revision.
Comments