(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.