Section 8 of UTGST Act 2017: Power to Grant Exemption from Tax

Provisions under Section 8 of the Union Territory Goods and Services Tax (UTGST) Act, 2017 relating to “Power to Grant Exemption from Tax”, are as under:

Section 8 of UTGST Act 2017: Power to Grant Exemption from Tax (CHAPTER III – LEVY AND COLLECTION OF TAX)

(1) Where the Central 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 Central 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 Central 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.

(4) Any notification issued by the Central Government under sub-section (1) of section 11 or order issued under sub-section (2) of the said section of the Central Goods and Services Tax Act shall be deemed to be a notification or, as the case may be, an order issued under this Act.

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 8 of UTGST Act, 2017

Section 8 of the Union Territory Goods and Services Tax (UTGST) Act, 2017 pertains to the “Power to Grant Exemption from Tax” and provides the Central Government with the authority to grant tax exemptions for specific goods or services under certain circumstances. The section can be broken down into four subsections, each of which serves a distinct purpose:

Section 8(1) of UTGST Act, 2017

Subsection (1) enables the Central Government to grant general exemptions from tax on specified goods or services, either absolutely or subject to certain conditions. This can be done through a notification, provided that the exemption is in the public interest and based on the recommendations of the GST Council.

Section 8(2) of UTGST Act, 2017

Subsection (2) allows the Central Government to grant exemptions on a case-by-case basis for goods or services under exceptional circumstances. Again, this must be in the public interest and based on the recommendations of the GST Council. The exceptional circumstances must be specified in the special order granting the exemption.

Section 8(3) of UTGST Act, 2017

Subsection (3) gives the Central Government the authority to issue explanations for any notification under subsection (1) or order under subsection (2) within one year of its issuance. The aim of these explanations is to clarify the scope or applicability of the notifications or orders. These explanations will have retrospective effect, as if they had always been part of the original notification or order.

Section 8(4) of UTGST Act, 2017

Subsection (4) states that any notifications or orders issued under Section 11 of the Central Goods and Services Tax (CGST) Act will be considered as notifications or orders under the UTGST Act. This ensures consistency and uniformity in the application of tax exemptions across the central and union territory tax systems.

The Explanation at the end of Section 8 clarifies that when an exemption is granted absolutely, the registered person supplying the exempted goods or services must not collect tax in excess of the effective rate for those goods or services.

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Note: The UTGST Act 2017 has been notified vide GOI Notification dated 12/04/2017, which has subsequently been amended  through UTGST (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 UTGST/ 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.