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CMA Intermediate · Direct and Indirect Taxation · Exemption from Tax

Under Section 11 of the CGST Act, 2017, the Government may exempt goods or services generally by notification. Which of the following is a requirement for issuing such a notification?

A general exemption notification under Section 11(1) needs two things: the Government's satisfaction that it is necessary in the public interest, and the prior recommendations of the GST Council. It may be absolute or conditional, and no Parliamentary approval is required for the notification.

  1. AThe Government must be satisfied that it is necessary in the public interest, and must act on the recommendations of the GST CouncilCorrect
  2. BThe Government may act on its own discretion without any recommendation of the GST Council
  3. CThe exemption can only be granted subject to conditions and never absolutely
  4. DThe exemption must be approved by Parliament before it takes effect

Explanation

Section 11(1) requires the Government to be satisfied that exemption is necessary in the public interest and to act on the Council's recommendations. The Act allows exemption either absolutely or subject to conditions, so the option saying conditions are mandatory is wrong. Parliamentary approval is not required.

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