Power to Government to grant exemption :
Schedule to GST Law prescribe the rate of GST for supply of various goods and services. These rates are fixed by Parliament and changing these rates is time consuming. However, Government needs flexibility in operations of taxing statute. As the circumstances change, quick adoption to changing situations is required.
Hence, as per section 11(1) of CGST Act, Central/State Government has been granted to reduce GST rates as per requirements, by issuing a general exemption notification. This notification can be issued only on basis of recommendation of GST Council. The exemption should be in public interest.
The general exemption can be general either absolutely or subject to such conditions as may be specified in the notification. The exemption can be absolute (unconditional) or subject to conditions.
The exemption can be in respect of goods or services or both of any specified description. Exemption can be from the whole or any part of the tax leviable thereon.
There is identical provision in section 6(1) of IGST Act.
There is parallel provision in section 5A(1) of Central Excise Act in respect of excise duty and section 25(1) of Customs Act in respect of customs duty.
Provision of delegation of powers to Government for granting exemption have been upheld by Supreme Court – P. J. Irani v. State of Madras – 1962 (2) SCR 169. * State of Bihar v. Bihar Chamber of Commerce – 1996 (1) SCALE 760 * Orient Weaving Mills v. UOI AIR 1963 SC 98 = 1978 (2) ELT J311 (SC 5 member bench).