Section 8 of The Union Territory Goods and Services Tax Act, 2017
- (1)Where the Central Government is satisfied that it is necessary in the public interest so to do, it may, on the recommendations of the Council, by notification, exempt generally either absolutely or subject to such conditions as may be specified therein, goods or services or both of any specified description from the whole or any part of the tax leviable thereon with effect from such date as may be specified in such notification.
- (2)Where the Central Government is satisfied that it is necessary in the public interest so to do, it may, on the recommendations of the Council, by special order in each case, under circumstances of an exceptional nature to be stated in such order, exempt from payment of tax any goods or services or both on which tax is leviable.
- (3)The Central Government may, if it considers necessary or expedient so to do for the purpose of clarifying the scope or applicability of any notification issued under sub-section (1) or order issued under sub-section (2), insert an explanation in such notification or order, as the case may be, by notification at any time within one year of issue of the notification under sub-section (1) or order under sub-section (2), and every such explanation shall have effect as if it had always been the part of the first such notification or order, as the case may be.
- (4)Any notification issued by the Central Government under sub-section (1) of section 11 or order issued under sub-section (2) of the said section of the Central Goods and Services Tax Act shall be deemed to be a notification or, as the case may be, an order issued under this Act. Explanation.--For the purposes of this section, where an exemption in respect of any goods or services or both from the whole or part of the tax leviable thereon has been granted absolutely, the registered person supplying such goods or services or both shall not collect the tax, in excess of the effective rate, on such supply of goods or services or both.
Summary
- The Central Government can decide to excuse certain goods or services from the Union territory tax if it benefits the general public.
- This exemption can be granted for a whole category of items through a general public notice, or for a specific, exceptional case through a special order.
- If the government needs to clarify what an exemption covers, it can add an explanation to the original notice up to one year after issuing it.
- Any tax exemption notice or order made under Section 11 of the Central Goods and Services Tax Act automatically applies as an exemption under this Act too.
- If the government grants a complete tax exemption on an item, the seller is legally forbidden from collecting that tax from the buyer.
Practical examples
FAQ
1. Can the government excuse someone from paying the tax?
Yes, the government can exempt specific goods or services from the tax if it is in the public interest.
2. How long does the government have to clarify a confusing tax exemption rule?
The government can issue a clarifying explanation within one year of the original exemption notice or order.
3. If an item is completely exempt from tax, can a shop still charge me for it just in case?
No, if an item is completely exempt, the seller is not allowed to collect any tax on it in excess of the effective rate.
4. Do central tax exemptions apply to the Union territory tax?
Yes, exemptions issued under Section 11 of the Central Goods and Services Tax Act are treated as if they were issued under this Union territory law.
Test yourself
Q1.Under Section 8 of The Union Territory Goods and Services Tax Act, 2017, what is the consequence of the Central Government issuing an exemption notification under sub-section (1) of Section 11 of the Central Goods and Services Tax Act?
Q2.Under Section 8 of The Union Territory Goods and Services Tax Act, 2017, what condition must exist for the Central Government to grant a tax exemption by a special order rather than a general notification?
Q3.Under Section 8 of The Union Territory Goods and Services Tax Act, 2017, what is the time limit for the Central Government to insert an explanation into an exemption notification to clarify its scope?
Q4.Under Section 8 of The Union Territory Goods and Services Tax Act, 2017, if an item is granted an absolute exemption from the whole tax, what restriction is placed on the registered seller?