GST Jamku AIPower to grant exemption from tax.
section 11(1)
Where the 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.
Power to Grant Tax Exemptions
In the realm of taxation, there exists a significant authority known as the power to grant exemption from tax. This authority is outlined in Section 11(1) and holds the potential to shape the taxation landscape based on considerations of public interest.
The pivotal provision, Section 11(1), empowers the government to make decisions that can have far-reaching effects on taxation. When the government deems it necessary in the public interest, it can, with the recommendations of the Council, issue a notification. This notification holds the power to grant exemptions, either absolute or subject to specified conditions, for goods, services, or both, of a particular description. The exemption can apply to the entire tax or only a part of it. The effectiveness of this exemption comes into play from a specified date mentioned in the notification.
Granting Exemptions for Public Good
The core essence of Section 11(1) lies in the government's ability to consider public interest as a primary factor in making decisions about tax exemptions. This reflects a broader perspective where taxation measures are not rigid but can be molded to align with the welfare of the public.
Notification Mechanism
To exercise the power bestowed by Section 11(1), the government employs a notification system. Through this system, it communicates its decisions regarding tax exemptions. The recommendations of the Council, a key advisory body, play a crucial role in shaping these decisions.
Versatility in Exemption Scope
Section 11(1) provides flexibility in the scope of exemptions. The government can opt for absolute exemptions or choose to impose specific conditions on the granted exemptions. This adaptability allows for a nuanced approach to taxation, catering to the diverse needs and dynamics of different goods and services.
Specifying Dates for Implementation
The power vested in Section 11(1) is not only about granting exemptions but also involves determining when these exemptions come into effect. The government specifies a date in the notification, adding a temporal dimension to the application of the exemption.
In conclusion, Section 11(1) represents a significant tool in the hands of the government to shape taxation policies dynamically. By considering public interest and employing a notification mechanism, it can craft exemptions that serve the broader welfare of the society. The flexibility provided by this section allows for a balanced approach, ensuring that the tax landscape remains responsive to evolving needs and circumstances.
section 11(2)
Where the 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.
In situations where the government believes it is necessary for the greater good of the public, it can utilize the power vested in Section 11(2) to exempt specific goods or services from tax payments. This authority is exercised through special orders issued on a case-by-case basis, with the Council's recommendations playing a crucial role in the decision-making process.
Exceptional Circumstances
The government's decision to grant tax exemptions is based on the identification of exceptional circumstances. These circumstances, as outlined in the special order, serve as the foundation for exempting certain goods, services, or both from tax liabilities. The government must be satisfied that such exemptions are in the best interest of the public.
Recommendations by the Council
Before the government issues a special order for tax exemption, it relies on the recommendations put forth by the Council. The Council plays a significant role in advising the government on whether specific goods or services warrant exemption based on the exceptional circumstances presented in each case.
Conclusion
The power vested in Section 11(2) allows the government to make decisions in the public interest regarding tax exemptions. By considering the recommendations of the Council and assessing exceptional circumstances, the government can issue special orders to exempt certain goods, services, or both from tax payments. This process ensures a thoughtful and case-specific approach to granting tax exemptions when deemed necessary for the well-being of the public.
section 11(3)
The 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.
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.
Power to Grant Tax Exemptions
In certain situations, the government has the authority to provide exemptions from taxes. This authority is outlined in Section 11(3) of the relevant legislation. The government can exercise this power if it deems it necessary or expedient to clarify the scope or applicability of any notification issued under sub-section (1) or an order issued under sub-section (2).
Inserting Explanations
To achieve this clarification, the government can insert an explanation in the notification or order, within one year of its issuance under sub-section (1) or sub-section (2). This added explanation will be treated as if it had always been a part of the initial notification or order.
Understanding Exemptions
For the purpose of Section 11(3), when an exemption is granted for certain goods or services from the whole or a part of the tax that would normally apply, the registered person supplying these goods or services should not collect tax exceeding the effective rate. This rule applies to the supply of goods or services for which an absolute exemption has been granted.