Central Govt has been given power to exempt any supply of goods/ services from CGST from whole or any part of the tax leviable thereon only u/s 11 of the CGST Act and u/s 6 of the IGST Act.

It means all Notifications/ Order for giving exemption/concession can only be issued u/s 11 of the CGST Act and u/s 6 of the IGST Act.

Similar power has been given u/s 11 of the respective SGST Act.

Section 11(1)

If Govt. is satisfied that it is necessary in the public interest so to do,

it may by notification, exempt,

either absolutely or subject to such conditions as may be specified therein,

goods or services or both of any specified description

from whole or any part of the tax leviable thereon

with effect from such date as may be specified in such notification.

Gov may exempt any goods or services from whole or any part of tax by issue of notifications u/s 11(1).

Exemption may be given with or without conditions.

Exemption must be granted in public interest.

For updated list of exempted goods and services, click here

Refer section 2(47) for meaning of “Exempt Supply”

Explanation to Section 11

If an exemption from the whole or part of the tax has been granted absolutely (without conditions),

RP shall not collect the tax, in excess of the effective rate, on such supplies.

In case of absolute and fully exemption, RP shall not charge any tax on such supplies. 

In case of absolute but partly exemption, RP shall not charge tax in excess of effective tax rate after partly exemption. 

In case of conditional exemption, RP has option to avail the conditional exemption or not. 

Section 11(2)

If Govt. is satisfied that it is necessary in the public interest so to do,

it may 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.

Exemption may be granted by a special order in case of the circumstances of an exceptional nature.

Section 11(3)

If Govt considers necessary or expedient for clarifying the scope or applicability of any notification issued u/ss (1) or order issued u/ss (2)

Govt may insert an explanation in such notification or order by notification at any time within 1 year of issue of the notification u/ss (1) or order u/ss (2), and

every such explanation shall have effect as if it had always been the part of the first such notification or order.

Wherever the Government feels that there is a need to clarify the scope or applicability of any notification/order issued under this section, it can issue an explanation within 1 year of issue of said notification/ order. Such explanation shall have effect as if it was there when first such notification/ order was issued, i.e. explanation so inserted would be effective retrospectively.

Circular No. 120/39/2019- GST dated 11-10-2019

Principal Notification No. 11/2017 CT (R) dated 28.06.2017 came into force with effect from 01.07.2017. Thereafter, a new entry - Entry no. 3(vi) was inserted w.e.f. 21.09.2017. Subsequently, an explanation was also inserted with respect to entry no. 3(vi) by issue of a notification on 26.07.2018 [i.e. within 1 year of the insertion of entry 3(vi)].

Although the effective date mentioned in the notification which inserted said explanation was 27.07.2018, said explanation will be effective from the inception of entry 3(vi) in notification i.e. 21.09.2017 and not 27.07.2018.