Section 6 of IGST Act 2017: Power to Grant Exemption from Tax

Provisions under Section 6 of the Integrated Goods and Services Tax (IGST) Act, 2017 relating to “Power to Grant Exemption from Tax”, are as under:

Section 6 of IGST 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 6 of the IGST Act, 2017

Section 6 of the Integrated Goods and Services Tax (IGST) Act, 2017 outlines the government’s power to grant exemptions from tax on goods or services or both. This commentary breaks down the three subsections of Section 6, highlighting key provisions:

General Exemption: Section 6(1) of the IGST Act

The government, if satisfied that it is necessary in the public interest, may grant general exemptions on the recommendation of the Council. Exemptions can be absolute or conditional and apply to goods or services of any specified description. The exemptions can pertain to the whole or part of the tax leviable on those goods or services. The effective date of the exemption will be specified in the notification.

Special Exemption: Section 6(2) of the IGST Act

In exceptional circumstances, the government may grant a special exemption from tax payment for specific goods or services. This exemption is granted on a case-by-case basis, again on the recommendation of the Council and requires an explanation of the exceptional nature of the circumstances.

Explanations and Clarifications: Section 6(3) of the IGST Act

The government has the power to issue explanations for notifications or orders under subsections (1) and (2) to clarify their scope or applicability. The explanation can be issued within one year of the original notification or order and is considered as if it had always been a part of the original document.

The Explanation at the end of Section 6 emphasizes that if an exemption is granted absolutely, the registered person supplying the goods or services should not collect tax in excess of the effective rate on such supply.

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Note: The IGST Act 2017 has been notified vide GOI Notification dated 12/04/2017, which has subsequently been amended through IGST Extension to J&K Act 2017, IGST (Amendment) Act 2018. Finance Act 2019, Finance Act 2020, Finance Act 2021, Finance Act, 2022 and Finance Act, 2023, including various Notifications issued by the Govt./ CBIC from time to time, relating to the commencement dates of various Sections/ Provisions in the respective IGST/ 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.