Chapter VII - Tax invoice, credit and debit notes
Section 32
Section 32: Unauthorised collection of tax
Section 32 stops a person from charging CGST as tax without statutory authority. It applies both to unregistered persons and to registered persons who collect tax outside the Act or Rules.
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Need advice on Section 32?
This article is for general information. Refer to the Central Goods and Services Tax Act, 2017 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(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 this Act.
(2) No registered person shall collect tax except in accordance with the provisions of this Act or the rules made thereunder.
Introduction
The invoice label matters less than the substance: an amount collected as central tax must be authorised. A business should verify registration status and the applicable tax treatment before showing or collecting a GST amount.
Key takeaways
No CGST collection while unregistered
An unregistered person cannot collect any amount by way of tax under the CGST Act.
Registration is not a blanket authority
A registered supplier may collect tax only as the Act and Rules permit.
Billing controls are practical compliance
Reconcile GSTIN status, product or service tax treatment and invoice configuration before charging customers.
Unregistered suppliers
Subsection (1) prohibits a person who is not registered from collecting an amount by way of CGST on a supply. Check live registration status before using tax invoice templates.
Registered suppliers
Subsection (2) requires collection to follow the Act and Rules. The applicable supply, exemption, composition and invoicing provisions determine whether and how tax may be charged.
Correcting a billing error
Identify affected invoices, collections and returns. Review the applicable adjustment, refund or demand provisions before changing customer documents; section 32 itself does not prescribe a complete correction process.
Practical checklist
Do
- Verify GST registration and tax treatment before charging CGST.
- Audit billing templates when registration or scheme status changes.
Avoid
- Show a CGST tax amount while unregistered.
- Treat registration alone as authority to charge tax on every supply.
Frequently asked questions
Can an unregistered supplier collect CGST from a customer?
No. Section 32(1) expressly prohibits it.
Can a registered supplier always charge CGST?
No. Collection must conform to the Act and Rules, including the applicable supply, exemption and scheme rules.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026