Sec 32 – Prohibition of unauthorised collection of tax

32.1 Analysis
Collection of tax is not a statutory right but a contractual right. The person collecting taxes is in a sense an agent of the Government. As such, no recipient is obliged to reimburse the supplier taxes due on the supply. At the same time, every taxable person (in case of forward charge) remains liable to deposit applicable tax to the Government. It is the wisdom of the supplier to include ‘tax extra’ in the offer to enable recourse to recoup tax. Eligibility to claim credit also does not impose any implicit duty to reimburse the tax if the terms of offer are silent about tax.
This provision casts an obligation of each – unregistered person and registered taxable person with regard to collection of tax on supply:
—     unregistered person is not to collect tax or any sum ‘by way of’ tax; and
—     registered taxable person is to collect tax only in the manner prescribed
It is important to differentiate between the restriction placed by this provision and the contractual route necessary to recoup tax by the supplier. Only tax that is collected as ‘CGSTSGST’ or ‘IGST’ or UTGST is to be paid to the Government. Any other loss recoupment of input tax credit foregone or forfeited does not come within this restriction.