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CMA Intermediate · Direct and Indirect Taxation · Exemption from Tax

Under Section 6 of the IGST Act, 2017, which statement correctly describes the Government's power to grant exemption from integrated tax?

Section 6(1) of the IGST Act lets the Government, in the public interest and on the GST Council's recommendations, exempt goods or services or both from the whole or any part of integrated tax, either absolutely or subject to conditions.

  1. AIt can exempt goods or services from the whole or any part of the tax, absolutely or subject to conditions, by notification on the Council's recommendationsCorrect
  2. BIt can exempt only the whole of the tax and never a part of it
  3. CIt can exempt only services and not goods
  4. DIt can exempt only with prior approval of the State Legislatures

Explanation

IGST Section 6(1) mirrors CGST Section 11(1): exemption of goods or services or both, from the whole or any part of the tax, absolutely or conditionally, on the Council's recommendations in the public interest. The options limiting it to the whole tax or to services only are contrary to the text. State Legislature approval is not required.

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