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CMA Intermediate · Direct and Indirect Taxation · Exemption from Tax

Section 11A of the CGST Act, 2017 (inserted w.e.f. 1 November 2024) empowers the Government, on the Council's recommendation, to direct that tax need not be paid in which situation?

Section 11A lets the Government, on the Council's recommendation, direct by notification that tax not be recovered where a general practice existed of not levying or short-levying central tax on supplies that were in fact liable. It does not cover one taxpayer's own choice or late payment.

  1. AWhere a practice was generally prevalent of not levying, or short-levying, central tax on supplies that were actually liable to itCorrect
  2. BWhere a registered person has voluntarily decided not to levy tax on its own supplies
  3. CWhere the supply is exempt under a notification issued under Section 11(1)
  4. DWhere tax was levied correctly but paid late

Explanation

Section 11A applies where a practice was or is generally prevalent regarding levy (including non-levy) of central tax and the supplies were liable to tax or to a higher tax. The Government may then direct, by notification on the Council's recommendation, that the tax or the excess need not be paid. A single taxpayer's own choice or late payment is not a general practice.

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