Question

The maximum rate for CGST is :

• A. 5%
• B. 20%
• C. 18%
• D. 40%

Hint:

The CGST Act itself fixes a ceiling on the rate. Recall the limit given in Section 9.

Answer 1

The Correct Option is B

Step 1: Understanding the Concept:
CGST is the Central Goods and Services Tax. It is levied by the Centre on supply of goods and services within a State. The CGST Act fixes a ceiling on the rate that can be charged.

Step 2: Key Rule:
Section 9 of the CGST Act says that the rate of CGST shall not exceed 20%. The actual rates are notified by the Government on the advice of the GST Council, but they stay below this limit.

Step 3: Check the options:
5% is only one of the GST slabs (together with 12%, 18% and 28%), so it is not the maximum.
18% is also an actual combined GST slab. It is not the legal ceiling for CGST alone.
40% is above the limit set in the Act, so CGST cannot be that high.
20% is the upper limit stated in the Act.

Final Answer:
The maximum rate of CGST is 20%. This is option (B).