Direct and Indirect Taxation · Exemption from Tax

Section 6 IGST Act: Power to Grant Exemption

Updated 10 October 2026 · Fact-checked

Section 6 of the IGST Act lets the Government, when satisfied it is necessary in the public interest and on the Council's recommendation, exempt goods or services from the whole or part of IGST. It does so by a general notification or by a special order in exceptional cases. An absolute exemption bars collecting tax above the effective rate.

Understand Power to Grant Exemption under Section 6 IGST Act

GST is levied on two tracks. CGST and SGST/UTGST apply to intra-State supplies. IGST applies to inter-State supplies and imports. Exemption is a relief from tax that would otherwise be leviable, so each Act needs its own exemption power. Section 6 of the IGST Act is that power for integrated tax.

The power rests with the Government, which acts on the recommendations of the Council and only when it is satisfied that it is necessary in the public interest. These three conditions appear together in the section. If an exam question says an officer or a State decided to exempt, the answer is wrong on the first condition.

There are two routes. Under sub-section (1), a general exemption is given by notification. It covers goods or services of a specified description, either absolutely or subject to conditions. It covers the whole tax or any part of it. It takes effect from the date stated in the notification. Under sub-section (2), a special order can exempt any goods or services on which tax is leviable. It is made in each case and only in circumstances of an exceptional nature, which must be stated in the order.

Sub-section (3) lets the Government clarify the scope of a notification or special order by inserting an Explanation by notification, within one year of issue. That Explanation has effect as if it had always been part of the original notification or order. The section ends with its own Explanation: where an exemption is granted absolutely, the registered person supplying shall not collect tax in excess of the effective rate.

Section 11 of the CGST Act is almost word for word the same. The difference is the tax: section 11 CGST deals with central tax, section 6 IGST deals with integrated tax. Section 11A of the CGST Act (non-recovery of tax not levied or short-levied due to general practice) has no matching provision in section 6 of the IGST Act text supplied.

Key rules to remember

Conditions for exemption: Government satisfied + public interest + Council's recommendation = power to exempt; All three must be present for both the notification route and the special order route.
General exemption, s.6(1): Notification → specified goods/services → whole or part of tax → absolute or conditional → from the stated date; Applies generally to goods or services of a specified description.
Special order, s.6(2): Special order → each case → exceptional circumstances stated in the order; Not a general relief. It is case-specific and must record the exceptional circumstances.
Explanation by notification, s.6(3): Explanation inserted within 1 year of issue → effect as if always part of the original; Used to clarify scope or applicability only. It operates retrospectively to the original date.
Effective rate bar (Explanation to s.6): Absolute exemption → supplier must not collect tax in excess of the effective rate; Applies to a registered person supplying the exempted goods or services.
Section 6 IGST vs section 11 CGST: Same structure; s.6 IGST covers integrated tax, s.11 CGST covers central tax; The text of sub-sections (1) to (3) and the Explanation is the same in both Acts.

How to solve Power to Grant Exemption under Section 6 IGST Act questions

Use this method for any question on exemption under the IGST Act, whether it asks for the power, the route, or the effect of an exemption.

1Identify the tax involved. If it is IGST (inter-State supply or import), cite section 6 of the IGST Act. If it is CGST, cite section 11 of the CGST Act.
2State the three conditions: the Government is satisfied, it is necessary in the public interest, and the Council has recommended it.
3Decide the route. A class of goods or services described generally points to a notification under s.6(1). A single case with exceptional circumstances points to a special order under s.6(2).
4Note the extent and terms: whole or part of the tax, absolute or conditional, and the effective date given in the notification.
5Check whether an Explanation has been inserted to clarify scope. Confirm it came within one year of issue, and say it applies as if always part of the original.
6Apply the Explanation to the section: for an absolute exemption, the supplier must not collect tax above the effective rate.
7Conclude clearly: is the supply exempt, wholly or partly, and what must the supplier do about tax collection?

Quickest way: Three-point scan for exemption questions

When to use it: Use it for MCQs and short notes where you have under two minutes.

Ask which Act is involved. IGST means section 6, CGST means section 11.
Ask who acts and on what basis. The answer is the Government, on the Council's recommendation, in the public interest.
Ask which route. Notification means general, special order means exceptional circumstances in a particular case. Then check the one-year limit for an Explanation and the effective-rate bar for absolute exemption.

Common mistakes in Power to Grant Exemption under Section 6 IGST Act

Saying the GST Council grants the exemption.
The Council is so prominent in GST that students treat it as the deciding authority.
Fix: Write that the Government exempts on the Council's recommendation. The Council recommends. It does not itself exempt.
Quoting section 11 of the CGST Act for an inter-State supply.
The two sections read almost identically, so students use the one they remember.
Fix: Match the section to the tax. IGST exemption is section 6 of the IGST Act. CGST exemption is section 11 of the CGST Act.
Treating a special order as a general exemption.
Both sub-sections 6(1) and 6(2) are about exemption, so they blur together.
Fix: Remember that a special order is made in each case and must state circumstances of an exceptional nature. A general exemption is by notification for a specified description.
Allowing the Explanation to be inserted at any time.
Students remember that an Explanation is retrospective and forget the time limit.
Fix: The Explanation must be inserted by notification within one year of the original notification or order. Then it has effect as if it had always been part of it.
Forgetting the effective-rate bar on collection of tax.
Students focus on the power to exempt and skip the closing Explanation.
Fix: For an absolute exemption, a registered supplier must not collect tax in excess of the effective rate.
Writing that exemption must always be total and unconditional.
The word 'exempt' sounds complete.
Fix: The section allows exemption from the whole or any part of the tax, absolutely or subject to conditions.

Worked examples

Example 1

A student writes: 'Under the IGST Act, a State Government may by order exempt inter-State supplies of a class of goods from IGST if it thinks fit.' Examine this statement with reference to section 6 of the IGST Act.

Show the solution

Section 6(1) gives the power to 'the Government', acting on the recommendations of the Council, by notification.
The Government must be satisfied that exemption is necessary in the public interest.
The statement names a State Government, omits the Council's recommendation, and omits the public interest condition.
The statement also says 'if it thinks fit', which is not the test. The test is satisfaction that exemption is necessary in the public interest.

Answer: The statement is incorrect. Under section 6(1) of the IGST Act, the Government may exempt goods or services of a specified description, wholly or partly, absolutely or conditionally, by notification. It acts only on the Council's recommendation and only when satisfied that it is necessary in the public interest.

Example 2

Distinguish between exemption by notification under section 6(1) and exemption by special order under section 6(2) of the IGST Act. Also state the effect of an Explanation inserted under section 6(3) and the restriction on the supplier when exemption is absolute.

Show the solution

Notification, s.6(1): it exempts goods or services of a specified description generally, from the whole or part of the tax, absolutely or subject to conditions, from the date specified in it.
Special order, s.6(2): it exempts any goods or services on which tax is leviable, in each case, in circumstances of an exceptional nature that are stated in the order.
Both need the Government's satisfaction that it is necessary in the public interest, and the Council's recommendation.
Explanation under s.6(3): the Government may insert it by notification within one year of the notification or order, to clarify its scope or applicability. It has effect as if it had always been part of the original.
Restriction: where exemption is absolute, the registered supplier shall not collect tax in excess of the effective rate.

Answer: A notification under s.6(1) is a general exemption for a specified description of goods or services. A special order under s.6(2) is made case by case in exceptional circumstances stated in the order. An Explanation inserted within one year applies as if always part of the original notification or order. Where exemption is absolute, the supplier must not collect tax above the effective rate.

Exam tips

For a comparison between section 11 CGST and section 6 IGST, state that the structure and wording are the same and the difference lies in the tax covered: central tax versus integrated tax.
In short notes, use the order: authority, conditions, two routes, Explanation within one year, effective-rate bar. It earns step marks.
In MCQs, watch for options that replace the Government with the Council or a State, or drop the public interest condition. Those are usually the wrong ones.
Do not attach section numbers to rules you are unsure of. Section 6 IGST and section 11 CGST are safe to quote.
If a question mentions 'exceptional circumstances', go straight to the special order under sub-section (2).

Practice questions from Exemption from Tax

Power to Grant Exemption under Section 6 IGST Act in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Power to Grant Exemption under Section 6 IGST Act: frequently asked questions

What is section 6 of the IGST Act about?

It gives the Government the power to exempt goods or services from the whole or part of integrated tax. The power is used on the Council's recommendation and only where it is necessary in the public interest. It can be exercised by general notification or by a special order in exceptional cases.

What is the difference between section 11 CGST and section 6 IGST?

The provisions are worded the same way and work the same way. Section 11 of the CGST Act covers exemption from central tax. Section 6 of the IGST Act covers exemption from integrated tax on inter-State supplies and imports.

When can a special order under section 6(2) be issued?

Only in circumstances of an exceptional nature, which must be stated in the order. It is made in each case. It still needs the Government's satisfaction that it is necessary in the public interest and the Council's recommendation.

Can a supplier charge tax on an absolutely exempt supply?

No, not above the effective rate. The Explanation to section 6 says that where exemption is granted absolutely, the registered person supplying the goods or services shall not collect tax in excess of the effective rate.