Section 11 of CGST Act 2017: Power to Grant Exemption from Tax

Provisions under Section 11 of the Central Goods and Services Tax (CGST) Act, 2017 relating to “Power to Grant Exemption from Tax”, are as under:

Section 11 of CGST Act 2017: Power to Grant Exemption from Tax (CHAPTER III LEVY AND COLLECTION OF TAX)

(1) Where the Government is satisfied that it is necessary in the public interest so to do, it may, on the recommendations of the Council, by notification, exempt generally, either absolutely or subject to such conditions as may be specified therein, goods or services or both of any specified description from the whole or any part of the tax leviable thereon with effect from such date as may be specified in such notification.

(2) Where the Government is satisfied that it is necessary in the public interest so to do, it may, on the recommendations of the Council, by special order in each case, under circumstances of an exceptional nature to be stated in such order, exempt from payment of tax any goods or services or both on which tax is leviable.

(3) The Government may, if it considers necessary or expedient so to do for the purpose of clarifying the scope or applicability of any notification issued under sub-section (1) or order issued under sub-section (2), insert an explanation in such notification or order, as the case may be, by notification at any time within one year of issue of the notification under sub-section (1) or order under sub-section (2), and every such explanation shall have effect as if it had always been the part of the first such notification or order, as the case may be.

Explanation.- For the purposes of this section, where an exemption in respect of any goods or services or both from the whole or part of the tax leviable thereon has been granted absolutely, the registered person supplying such goods or services or both shall not collect the tax, in excess of the effective rate, on such supply of goods or services or both.

Amendments History:

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Commentary on Section 11 of the CGST Act

This Section deals with the power to grant exemptions from tax. It outlines the conditions under which the government can provide exemptions from CGST on the supply of goods or services or both:

i) Power to grant exemptions: Section 11 empowers the government to grant exemptions from CGST on the supply of goods or services or both. These exemptions can be granted generally (through notification) or in specific cases (through special order).

ii) Conditions for granting exemptions: The government can grant exemptions when it is satisfied that it is necessary in the public interest to do so. The exemptions must also be based on the recommendations of the GST Council.

iii) Notification for general exemptions: If the government decides to grant general exemptions, it can issue a notification specifying the goods or services or both that are exempt, either absolutely or subject to specified conditions. The notification will also specify the date from which the exemption will be effective.

iv) Special order for specific exemptions: In exceptional circumstances, the government can also issue a special order to exempt specific goods or services or both from the tax. The circumstances warranting the exemption must be mentioned in the order.

v) Explanation to notifications or orders: If the government deems it necessary or expedient to clarify the scope or applicability of any notification or order, it may insert an explanation in the notification or order. The explanation can be inserted within one year of the issue of the notification or order, and it will have retrospective effect as if it had always been a part of the original notification or order.

Section 11 of the CGST Act 2017 provides the government with the authority to grant exemptions from CGST on the supply of goods or services or both. These exemptions can be granted either generally or in specific cases when it is deemed necessary in the public interest and are based on the recommendations of the GST Council.

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Note: The CGST Act 2017 has been notified vide GOI Notification dt. 12/04/2017, which has subsequently been amended through CGST (Extension to J&K) Act 2017, Finance Act 2018, CGST Amendment Act 2018, Finance Act 2019, Finance Act 2020, Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance 2020, Finance Act 2021, Finance Act 2022 including various Notifications issued by the Govt./ CBIC from time to time, relating to the commencement dates of various Sections/ Provisions in the respective CGST/ Amendment Acts, wherever required. Information on this page is a Section-wise compilation of the Amendments made by various Notifications issued by CBIC from time to time, with best possible efforts for accuracy. In any case, E&OE. For official/ updated information, please visit CBIC website.