Ch 6 - Exemption from GST by issue of Notification | GST Saral by CA Dhruv Aggarwal PDF Download

 Page 1


CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
 
 
 
 
 
 
 
 
 
 
CHAPTER 6 - Exempti on from GST by i ssue of Noti fi cati on 
 
 
 
 
 
CHAPTER 6 
 
Exemption from GST by issue of Notification 
 
EXECUTIVE SUMMARY 
 
?   Section 11(1) of CGST Act empowers Government to exempt any goods or services, by issuing 
notification on recommendation of GST Council [similar section 25(1) of Customs Act in respect of 
customs duty] 
?   Such exemption may be partial or fu l, conditional or unconditional. 
?   Absolute i.e. unconditional exemption (who ly or partly) is compulsory, while conditional notification 
is at option of taxable person. 
?   Government can also grant exemptions in exceptional cases under section 11(2) of CGST Act. This 
is a specific exemption and not a general notification. 
?   Government can add an explanation to exemption notification issues, within one year of issue of 
notification. 
?   An exemption notification should be strictly construed, but purposive construction is permissible. 
?   Strict interpretation of exemption notification at first stage but not at later stage. 
?   End use is not relevant for exemption unless specified in notification. 'For use' means for intended 
use. 
?   Department  cannot  cha lenge  the  certificate/clarification/license/authorization issued  of prescribed 
authority. 
?   Principle of promissory estoppel can apply to an exemption notification i.e. Government cannot resile 
from its promise. 
?   However,  exemption  can be withdrawn  anytime  if time  period  was not specified  in exemption 
notification. 
6.1 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 
Page 2


CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
 
 
 
 
 
 
 
 
 
 
CHAPTER 6 - Exempti on from GST by i ssue of Noti fi cati on 
 
 
 
 
 
CHAPTER 6 
 
Exemption from GST by issue of Notification 
 
EXECUTIVE SUMMARY 
 
?   Section 11(1) of CGST Act empowers Government to exempt any goods or services, by issuing 
notification on recommendation of GST Council [similar section 25(1) of Customs Act in respect of 
customs duty] 
?   Such exemption may be partial or fu l, conditional or unconditional. 
?   Absolute i.e. unconditional exemption (who ly or partly) is compulsory, while conditional notification 
is at option of taxable person. 
?   Government can also grant exemptions in exceptional cases under section 11(2) of CGST Act. This 
is a specific exemption and not a general notification. 
?   Government can add an explanation to exemption notification issues, within one year of issue of 
notification. 
?   An exemption notification should be strictly construed, but purposive construction is permissible. 
?   Strict interpretation of exemption notification at first stage but not at later stage. 
?   End use is not relevant for exemption unless specified in notification. 'For use' means for intended 
use. 
?   Department  cannot  cha lenge  the  certificate/clarification/license/authorization issued  of prescribed 
authority. 
?   Principle of promissory estoppel can apply to an exemption notification i.e. Government cannot resile 
from its promise. 
?   However,  exemption  can be withdrawn  anytime  if time  period  was not specified  in exemption 
notification. 
6.1 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 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
from the whole or any part of the tax leviable thereon. 
There is identical provision in section 6(1) of IGST Act. 
There is para lel 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). 
6.1-1 Exemption can be withdrawn anytime 
 
Exemption is a concession. It can be withdrawn under the very power in exercise of which exemption was 
granted - State of Haryana  v. Mahabir Vegetable Oils P Ltd. (2011) 3 SCC 778 = 9 Latest Case288 = 
5 GST 520 = 38 VST 514 (SC) - same view in respect of rebate in Shree Sidhbali Steels v. State of Uttar 
Pradesh (2011) 3 SCC 193 (SC 3 member bench). 
 
However, if exemption has been granted for a specific period, it cannot be withdrawn earlier on the basis of 
principle of promissory estoppel. 
6.1-2 Effective  date  of a notification 
 
The exemption notification becomes effective on the date as specified in the notification issued by Central/State 
Government - section 11(1) of CGST Act. 
 
6.1-3 Exemption can be withdrawn with retrospective effect only by Parliament/State Legislature 
 
Exemption  given  by notification  can be  withdrawn  only with prospective  effect  by another  notification. 
Parliament can withdraw exemption even with retrospective effect also, but it should be for valid reasons. 
Withdrawal  of exemption by notification  can be prospective only - Exemption cannot be withdrawn and 
duty cannot be enhanced with retrospective effect. - Jitender  Roller Flour Mills v. CTO (2002) 125 STC 
383  (AP  HC  DB)  *  Ganduri  Eswaraiah   v.  DCTO (2002)  125  STC  406  (AP  HC  DB)  *  Honest 
Corporation   v.  State  of  Tamilnadu  (1999)  113  STC  26  (Mad  HC  DB)  *  State  of  Tamilnadu  v. 
Kannapiran  Steel (1999) 112 STC 161 (Mad HC DB) * Wipro Ltd. v. State of Maharashtra (2004) 135 
STC  503 (Bom HC  DB).  Exemption notification cannot be amended  with retrospective  effect to curtail 
exemption - J K Udaipur Udyog v. State of Rajasthan (2003) 131 STC 176 (Raj HC DB). 
Exemption   can  be  withdrawn   by  Parliament  with  retrospective  effect  -  Exemption  given  by  a 
notification can be withdrawn by Parliament even with retrospective effect if it is against policy of legislature, as 
Parliament is supreme- RC Tobacco P Ltd. v. UOI 2005 (188) ELT 129 (SC). 
6.1-4 Different exemptions to different categories or classes permissible 
 
It is permissible to grant di fferent exemptions to di fferent classes, as long as a l those within a particular class 
are treated equa ly and uniformly. Statute can be declared invalid only when it is shown that the impugned 
statute is based on discrimination and that such discrimination is not referable to any classification which is 
rational and which has nexus with the object intended to be achieved by the Statute. 
Thus, granting exemption to sma l scale units, or to units manufacturing goods without aid of power, or to 
Government undertakings or to a class of consumers will be permissible. However, such classification should 
be in public interest and powers should be used bona fide. 
It is  we l recognised  that  State  enjoys  the  widest  latitude  where  measures  of economic  regulations  are 
concerned. State can pick and choose districts, objects, persons, methods and even rate for taxation if it does 
Page 3


CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
 
 
 
 
 
 
 
 
 
 
CHAPTER 6 - Exempti on from GST by i ssue of Noti fi cati on 
 
 
 
 
 
CHAPTER 6 
 
Exemption from GST by issue of Notification 
 
EXECUTIVE SUMMARY 
 
?   Section 11(1) of CGST Act empowers Government to exempt any goods or services, by issuing 
notification on recommendation of GST Council [similar section 25(1) of Customs Act in respect of 
customs duty] 
?   Such exemption may be partial or fu l, conditional or unconditional. 
?   Absolute i.e. unconditional exemption (who ly or partly) is compulsory, while conditional notification 
is at option of taxable person. 
?   Government can also grant exemptions in exceptional cases under section 11(2) of CGST Act. This 
is a specific exemption and not a general notification. 
?   Government can add an explanation to exemption notification issues, within one year of issue of 
notification. 
?   An exemption notification should be strictly construed, but purposive construction is permissible. 
?   Strict interpretation of exemption notification at first stage but not at later stage. 
?   End use is not relevant for exemption unless specified in notification. 'For use' means for intended 
use. 
?   Department  cannot  cha lenge  the  certificate/clarification/license/authorization issued  of prescribed 
authority. 
?   Principle of promissory estoppel can apply to an exemption notification i.e. Government cannot resile 
from its promise. 
?   However,  exemption  can be withdrawn  anytime  if time  period  was not specified  in exemption 
notification. 
6.1 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 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
from the whole or any part of the tax leviable thereon. 
There is identical provision in section 6(1) of IGST Act. 
There is para lel 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). 
6.1-1 Exemption can be withdrawn anytime 
 
Exemption is a concession. It can be withdrawn under the very power in exercise of which exemption was 
granted - State of Haryana  v. Mahabir Vegetable Oils P Ltd. (2011) 3 SCC 778 = 9 Latest Case288 = 
5 GST 520 = 38 VST 514 (SC) - same view in respect of rebate in Shree Sidhbali Steels v. State of Uttar 
Pradesh (2011) 3 SCC 193 (SC 3 member bench). 
 
However, if exemption has been granted for a specific period, it cannot be withdrawn earlier on the basis of 
principle of promissory estoppel. 
6.1-2 Effective  date  of a notification 
 
The exemption notification becomes effective on the date as specified in the notification issued by Central/State 
Government - section 11(1) of CGST Act. 
 
6.1-3 Exemption can be withdrawn with retrospective effect only by Parliament/State Legislature 
 
Exemption  given  by notification  can be  withdrawn  only with prospective  effect  by another  notification. 
Parliament can withdraw exemption even with retrospective effect also, but it should be for valid reasons. 
Withdrawal  of exemption by notification  can be prospective only - Exemption cannot be withdrawn and 
duty cannot be enhanced with retrospective effect. - Jitender  Roller Flour Mills v. CTO (2002) 125 STC 
383  (AP  HC  DB)  *  Ganduri  Eswaraiah   v.  DCTO (2002)  125  STC  406  (AP  HC  DB)  *  Honest 
Corporation   v.  State  of  Tamilnadu  (1999)  113  STC  26  (Mad  HC  DB)  *  State  of  Tamilnadu  v. 
Kannapiran  Steel (1999) 112 STC 161 (Mad HC DB) * Wipro Ltd. v. State of Maharashtra (2004) 135 
STC  503 (Bom HC  DB).  Exemption notification cannot be amended  with retrospective  effect to curtail 
exemption - J K Udaipur Udyog v. State of Rajasthan (2003) 131 STC 176 (Raj HC DB). 
Exemption   can  be  withdrawn   by  Parliament  with  retrospective  effect  -  Exemption  given  by  a 
notification can be withdrawn by Parliament even with retrospective effect if it is against policy of legislature, as 
Parliament is supreme- RC Tobacco P Ltd. v. UOI 2005 (188) ELT 129 (SC). 
6.1-4 Different exemptions to different categories or classes permissible 
 
It is permissible to grant di fferent exemptions to di fferent classes, as long as a l those within a particular class 
are treated equa ly and uniformly. Statute can be declared invalid only when it is shown that the impugned 
statute is based on discrimination and that such discrimination is not referable to any classification which is 
rational and which has nexus with the object intended to be achieved by the Statute. 
Thus, granting exemption to sma l scale units, or to units manufacturing goods without aid of power, or to 
Government undertakings or to a class of consumers will be permissible. However, such classification should 
be in public interest and powers should be used bona fide. 
It is  we l recognised  that  State  enjoys  the  widest  latitude  where  measures  of economic  regulations  are 
concerned. State can pick and choose districts, objects, persons, methods and even rate for taxation if it does 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
so reasonably. 
 
6.1-5 Recovery if post clearance conditions of exemption notification not complied with 
 
In Bombay Hospital Trust v. CC 2005 (188) ELT 374 (CESTAT 5 member LB), appe lant imported medial 
equipment at concessional rate of customs duty, subject to certain conditions to be fulfi led after their import. It 
was held that this is a case of continuous obligation and there is no time limit for raising demand in such case. It 
was also held that in such case demand is not u/s 28 of Customs Act (para lel section 11A of CEA), but under 
charging section of section 12 of Customs  Act (para lel section 3 of CEA)  and  the relevant  exemption 
notification, even if no bond was executed at the time of import. 
In Sunitidevi Singhania Hospital v. CC (2015) 317 ELT 81 (CESTAT), it was held that non-fulfilment of 
post import obligation is continuing obligation. Confiscation, fine and penalty can be imposed. 
6.1-6 Public Interest is essential 
 
The exemption notification can be issued only in public interest. Public interest means greatest happiness of 
greatest number. It is not necessary to disclose the exact nature of public interest of each notification. In India 
Cement v. State of AP (1988) 69 STC 305 (SC) = AIR 1988 SC 567, it was observed that exercise of 
power to tax may be norma ly presumed to be in public interest. Court will presume that the notification has 
been issued in public interest. Person cha lenging the tax has the heavy burden to prove that it is not in public 
interest. 
In UOI v. Jalyan Udyog - AIR 1994 SC 88 = 1993 (68) ELT 9 (SC) = 1994 (1) SCC 319, it has been held 
that public interest is guiding factor in the notification. If public interest demands, the exemption can be given 
who ly or partly, and with or without any conditions. The condition specified can relate to a stage subsequent 
to the date of clearance, if public interest so demands. The guiding factor is 'public interest'. - quoted with 
approval in UOI v. Paliwal Electricals P Ltd. (1996) 83 ELT 241 (SC) = 13 RLT 857 (SC) = AIR 1996 
SC 3106 = 1996 AIR SCW 1570. Exemption given for a specific period can also be withdrawn earlier, if 
public interest so requires. In State of Rajasthan  v. Gopal Oil Mills (1999) 115 STC 25 (SC), it was held 
that a benefit cannot be withdrawn unless public interest is shown. 
Term 'Public interest' is not vague or uncertain - The phrase 'public interest' is not vague and indefinite. - 
* Maneka Gandhi v. UOI - (1978) 1 SCC 248 = AIR 1978 SC 597 = (1978) 2 SCR 621 (SC 7 member 
bench) * Premium Granites  v. State of Tamilnadu (1994) 2 SCC 691 = 1994 AIR SCW 2048 = AIR 
1994 SC 2233 * Orissa Textiles v. State of Orissa 2002 AIR SCW 333 (SC 5 member bench). 
 
6.2 Absolute  i.e. unconditional exemption (wholly or partly) is compulsory 
 
Explanation  to section 11(3) of CGST Act states that 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 co lect the tax on such goods or services or both in 
excess of effective rate, on such supply of goods or services or both 
There is identical provision in explanation to section 6 of IGST Act. 
 
Thus, if a notification grants unconditional exemption from whole or part of GST to certain goods or services, 
the taxable person cannot pay GST on such goods or services in excess of effective rate of GST or IGST. 
6.2-1 When payment of GST could have been beneficial 
 
A  taxable  person  may  like  to  pay  GST  on his  goods  or  services  even  if the  goods  or  services  are 
unconditiona ly exempt, if he intends to avail input tax credit. If the taxable person does not pay GST, his 
customer cannot avail input tax credit, which is ultimately a loss as chain of input tax credit is broken. 
6.2-2 Conditional exemption at option of taxable  person 
Page 4


CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
 
 
 
 
 
 
 
 
 
 
CHAPTER 6 - Exempti on from GST by i ssue of Noti fi cati on 
 
 
 
 
 
CHAPTER 6 
 
Exemption from GST by issue of Notification 
 
EXECUTIVE SUMMARY 
 
?   Section 11(1) of CGST Act empowers Government to exempt any goods or services, by issuing 
notification on recommendation of GST Council [similar section 25(1) of Customs Act in respect of 
customs duty] 
?   Such exemption may be partial or fu l, conditional or unconditional. 
?   Absolute i.e. unconditional exemption (who ly or partly) is compulsory, while conditional notification 
is at option of taxable person. 
?   Government can also grant exemptions in exceptional cases under section 11(2) of CGST Act. This 
is a specific exemption and not a general notification. 
?   Government can add an explanation to exemption notification issues, within one year of issue of 
notification. 
?   An exemption notification should be strictly construed, but purposive construction is permissible. 
?   Strict interpretation of exemption notification at first stage but not at later stage. 
?   End use is not relevant for exemption unless specified in notification. 'For use' means for intended 
use. 
?   Department  cannot  cha lenge  the  certificate/clarification/license/authorization issued  of prescribed 
authority. 
?   Principle of promissory estoppel can apply to an exemption notification i.e. Government cannot resile 
from its promise. 
?   However,  exemption  can be withdrawn  anytime  if time  period  was not specified  in exemption 
notification. 
6.1 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 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
from the whole or any part of the tax leviable thereon. 
There is identical provision in section 6(1) of IGST Act. 
There is para lel 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). 
6.1-1 Exemption can be withdrawn anytime 
 
Exemption is a concession. It can be withdrawn under the very power in exercise of which exemption was 
granted - State of Haryana  v. Mahabir Vegetable Oils P Ltd. (2011) 3 SCC 778 = 9 Latest Case288 = 
5 GST 520 = 38 VST 514 (SC) - same view in respect of rebate in Shree Sidhbali Steels v. State of Uttar 
Pradesh (2011) 3 SCC 193 (SC 3 member bench). 
 
However, if exemption has been granted for a specific period, it cannot be withdrawn earlier on the basis of 
principle of promissory estoppel. 
6.1-2 Effective  date  of a notification 
 
The exemption notification becomes effective on the date as specified in the notification issued by Central/State 
Government - section 11(1) of CGST Act. 
 
6.1-3 Exemption can be withdrawn with retrospective effect only by Parliament/State Legislature 
 
Exemption  given  by notification  can be  withdrawn  only with prospective  effect  by another  notification. 
Parliament can withdraw exemption even with retrospective effect also, but it should be for valid reasons. 
Withdrawal  of exemption by notification  can be prospective only - Exemption cannot be withdrawn and 
duty cannot be enhanced with retrospective effect. - Jitender  Roller Flour Mills v. CTO (2002) 125 STC 
383  (AP  HC  DB)  *  Ganduri  Eswaraiah   v.  DCTO (2002)  125  STC  406  (AP  HC  DB)  *  Honest 
Corporation   v.  State  of  Tamilnadu  (1999)  113  STC  26  (Mad  HC  DB)  *  State  of  Tamilnadu  v. 
Kannapiran  Steel (1999) 112 STC 161 (Mad HC DB) * Wipro Ltd. v. State of Maharashtra (2004) 135 
STC  503 (Bom HC  DB).  Exemption notification cannot be amended  with retrospective  effect to curtail 
exemption - J K Udaipur Udyog v. State of Rajasthan (2003) 131 STC 176 (Raj HC DB). 
Exemption   can  be  withdrawn   by  Parliament  with  retrospective  effect  -  Exemption  given  by  a 
notification can be withdrawn by Parliament even with retrospective effect if it is against policy of legislature, as 
Parliament is supreme- RC Tobacco P Ltd. v. UOI 2005 (188) ELT 129 (SC). 
6.1-4 Different exemptions to different categories or classes permissible 
 
It is permissible to grant di fferent exemptions to di fferent classes, as long as a l those within a particular class 
are treated equa ly and uniformly. Statute can be declared invalid only when it is shown that the impugned 
statute is based on discrimination and that such discrimination is not referable to any classification which is 
rational and which has nexus with the object intended to be achieved by the Statute. 
Thus, granting exemption to sma l scale units, or to units manufacturing goods without aid of power, or to 
Government undertakings or to a class of consumers will be permissible. However, such classification should 
be in public interest and powers should be used bona fide. 
It is  we l recognised  that  State  enjoys  the  widest  latitude  where  measures  of economic  regulations  are 
concerned. State can pick and choose districts, objects, persons, methods and even rate for taxation if it does 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
so reasonably. 
 
6.1-5 Recovery if post clearance conditions of exemption notification not complied with 
 
In Bombay Hospital Trust v. CC 2005 (188) ELT 374 (CESTAT 5 member LB), appe lant imported medial 
equipment at concessional rate of customs duty, subject to certain conditions to be fulfi led after their import. It 
was held that this is a case of continuous obligation and there is no time limit for raising demand in such case. It 
was also held that in such case demand is not u/s 28 of Customs Act (para lel section 11A of CEA), but under 
charging section of section 12 of Customs  Act (para lel section 3 of CEA)  and  the relevant  exemption 
notification, even if no bond was executed at the time of import. 
In Sunitidevi Singhania Hospital v. CC (2015) 317 ELT 81 (CESTAT), it was held that non-fulfilment of 
post import obligation is continuing obligation. Confiscation, fine and penalty can be imposed. 
6.1-6 Public Interest is essential 
 
The exemption notification can be issued only in public interest. Public interest means greatest happiness of 
greatest number. It is not necessary to disclose the exact nature of public interest of each notification. In India 
Cement v. State of AP (1988) 69 STC 305 (SC) = AIR 1988 SC 567, it was observed that exercise of 
power to tax may be norma ly presumed to be in public interest. Court will presume that the notification has 
been issued in public interest. Person cha lenging the tax has the heavy burden to prove that it is not in public 
interest. 
In UOI v. Jalyan Udyog - AIR 1994 SC 88 = 1993 (68) ELT 9 (SC) = 1994 (1) SCC 319, it has been held 
that public interest is guiding factor in the notification. If public interest demands, the exemption can be given 
who ly or partly, and with or without any conditions. The condition specified can relate to a stage subsequent 
to the date of clearance, if public interest so demands. The guiding factor is 'public interest'. - quoted with 
approval in UOI v. Paliwal Electricals P Ltd. (1996) 83 ELT 241 (SC) = 13 RLT 857 (SC) = AIR 1996 
SC 3106 = 1996 AIR SCW 1570. Exemption given for a specific period can also be withdrawn earlier, if 
public interest so requires. In State of Rajasthan  v. Gopal Oil Mills (1999) 115 STC 25 (SC), it was held 
that a benefit cannot be withdrawn unless public interest is shown. 
Term 'Public interest' is not vague or uncertain - The phrase 'public interest' is not vague and indefinite. - 
* Maneka Gandhi v. UOI - (1978) 1 SCC 248 = AIR 1978 SC 597 = (1978) 2 SCR 621 (SC 7 member 
bench) * Premium Granites  v. State of Tamilnadu (1994) 2 SCC 691 = 1994 AIR SCW 2048 = AIR 
1994 SC 2233 * Orissa Textiles v. State of Orissa 2002 AIR SCW 333 (SC 5 member bench). 
 
6.2 Absolute  i.e. unconditional exemption (wholly or partly) is compulsory 
 
Explanation  to section 11(3) of CGST Act states that 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 co lect the tax on such goods or services or both in 
excess of effective rate, on such supply of goods or services or both 
There is identical provision in explanation to section 6 of IGST Act. 
 
Thus, if a notification grants unconditional exemption from whole or part of GST to certain goods or services, 
the taxable person cannot pay GST on such goods or services in excess of effective rate of GST or IGST. 
6.2-1 When payment of GST could have been beneficial 
 
A  taxable  person  may  like  to  pay  GST  on his  goods  or  services  even  if the  goods  or  services  are 
unconditiona ly exempt, if he intends to avail input tax credit. If the taxable person does not pay GST, his 
customer cannot avail input tax credit, which is ultimately a loss as chain of input tax credit is broken. 
6.2-2 Conditional exemption at option of taxable  person 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
The provision applies only in cases where exemption has been granted 'absolutely' i.e. unconditiona ly. It may 
be who ly or partly. 
Some exemptions are subject to some conditions In such cases, the taxable person may or may not avail of the 
concession or exemption. 
In Remedies (India) Pharmaceuticals v. CCE 1998(101) ELT 344 (CEGAT), it was held that benefit of a 
(conditional) exemption cannot be thrust upon an unwilling manufacturer [the words 'conditional' are not used 
in the order]. 
In CCE v. VIP Industries 1998(103) ELT 95 (CEGAT), it was held that a conditional exemption is at the 
option of assessee. - same view in Glaxo India  Ltd. v. CCE  1999(109)  ELT 211 (CEGAT)  * Ashok 
Organic Industries v. CCE 2000(122) ELT 773 (CEGAT) * Narayan  Polyplast v. CCE 2003(153) ELT 
160 (CEGAT). 
 
In Steelco Gujarat  v. CCE  2000 (122) ELT 381 (CEGAT),  the exemption notification was subject to 
condition that Cenvat credit should not be availed on inputs. The assessee did avail Cenvat. It was held that in 
such case, exemption could be denied, not the credit, i.e. assessee will be denied exemption, but he cannot be 
asked to reverse Cenvat credit. 
Exemption subject to condition that input tax credit should not be availed is conditional  and hence 
optional - If exemption is conditional, it is option of assessee. He may not fo low the condition prescribed and 
hence may pay duty e.g. a notification says : The goods and services are exempt from GST, provided that no 
input tax credit is availed. Hence, if input tax credit is availed, automatica ly, the exemption is not available and 
assessee can (in fact, has to) pay GST. 
6.2-3 Option to taxable  person if two exemption notifications available 
 
When there are two provisions under which an assessee (termed as taxable person in GST) could claim some 
benefit, it is for the assessee (termed as taxable person in GST) to choose one. -CIT v. Mahendra Mills 2000 
AIR SCW 1016 = AIR 2000 SC 1960 =243 ITR 56 = 109 Taxman 225 (SC). 
 
If assessee (termed as taxable person in GST) has option of either SSI exemption or availment of Cenvat 
credit (by paying excise duty on final product), he can choose either - CCE v. Grand Card Industries (2014) 
45 GST 356 = 44 Latest Case476 = 305 ELT 19 (Del HC DB). 
 
When two exemption notifications are available, assessee (termed as taxable person in GST) can choose any 
one. Department cannot pin down to avail exemption under a particular notification only - CCE v. Favourite 
Industries (2012) 7 SCC 153= 278 ELT 145 (SC) - affirming Favourite  Industries v. CCE (2003) 156 
ELT 802 (CEGAT). 
 
Where there are two exemption notifications that cover the goods in question, assessee (termed as taxable 
person in GST) is entitled to the benefit of that exemption notification which gives him greater relief, regardless 
of the fact that notification is general in its terms and the other notification is more specific to the goods. - HCL 
Ltd. v. CCE2001(130) ELT 405 = 76 ECC 11 (SC 3 member bench order) - quoted in ABB Ltd. v. CCE 
(2009) 21 STT 77 = 15 STR 23 (CESTAT 3 member bench) * CCE v. Modi Xerox (2012) 275 ELT 406 
(A l HC DB) * Ajay Industrial Corporation  v. CC (2015) 323 ELT 385 (CESTAT). 
If applicant is entitled to claim benefit under two di fferent notifications, he can claim more (i.e. better) benefit 
and it is the duty of authorities to grant such benefit to applicant - Share Medical Care v. UOI (2007) 4 SCC 
573 =209 ELT 321 (SC) - quoted in Coca Cola India v. CCE (2009) 22 STT 130 (Bom HC DB) * ABB 
Ltd. v. CCE (2009) 21 STT 77 = 15 STR 23 (CESTAT 3 member bench) * Semco Electrical  v. CCE 
(2010) 24 STT 508 (CESTAT SMB) * Winsome Yarns v. CCE (2015) 51 GST 649 = 59 Latest Case14 
Page 5


CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
 
 
 
 
 
 
 
 
 
 
CHAPTER 6 - Exempti on from GST by i ssue of Noti fi cati on 
 
 
 
 
 
CHAPTER 6 
 
Exemption from GST by issue of Notification 
 
EXECUTIVE SUMMARY 
 
?   Section 11(1) of CGST Act empowers Government to exempt any goods or services, by issuing 
notification on recommendation of GST Council [similar section 25(1) of Customs Act in respect of 
customs duty] 
?   Such exemption may be partial or fu l, conditional or unconditional. 
?   Absolute i.e. unconditional exemption (who ly or partly) is compulsory, while conditional notification 
is at option of taxable person. 
?   Government can also grant exemptions in exceptional cases under section 11(2) of CGST Act. This 
is a specific exemption and not a general notification. 
?   Government can add an explanation to exemption notification issues, within one year of issue of 
notification. 
?   An exemption notification should be strictly construed, but purposive construction is permissible. 
?   Strict interpretation of exemption notification at first stage but not at later stage. 
?   End use is not relevant for exemption unless specified in notification. 'For use' means for intended 
use. 
?   Department  cannot  cha lenge  the  certificate/clarification/license/authorization issued  of prescribed 
authority. 
?   Principle of promissory estoppel can apply to an exemption notification i.e. Government cannot resile 
from its promise. 
?   However,  exemption  can be withdrawn  anytime  if time  period  was not specified  in exemption 
notification. 
6.1 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 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
from the whole or any part of the tax leviable thereon. 
There is identical provision in section 6(1) of IGST Act. 
There is para lel 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). 
6.1-1 Exemption can be withdrawn anytime 
 
Exemption is a concession. It can be withdrawn under the very power in exercise of which exemption was 
granted - State of Haryana  v. Mahabir Vegetable Oils P Ltd. (2011) 3 SCC 778 = 9 Latest Case288 = 
5 GST 520 = 38 VST 514 (SC) - same view in respect of rebate in Shree Sidhbali Steels v. State of Uttar 
Pradesh (2011) 3 SCC 193 (SC 3 member bench). 
 
However, if exemption has been granted for a specific period, it cannot be withdrawn earlier on the basis of 
principle of promissory estoppel. 
6.1-2 Effective  date  of a notification 
 
The exemption notification becomes effective on the date as specified in the notification issued by Central/State 
Government - section 11(1) of CGST Act. 
 
6.1-3 Exemption can be withdrawn with retrospective effect only by Parliament/State Legislature 
 
Exemption  given  by notification  can be  withdrawn  only with prospective  effect  by another  notification. 
Parliament can withdraw exemption even with retrospective effect also, but it should be for valid reasons. 
Withdrawal  of exemption by notification  can be prospective only - Exemption cannot be withdrawn and 
duty cannot be enhanced with retrospective effect. - Jitender  Roller Flour Mills v. CTO (2002) 125 STC 
383  (AP  HC  DB)  *  Ganduri  Eswaraiah   v.  DCTO (2002)  125  STC  406  (AP  HC  DB)  *  Honest 
Corporation   v.  State  of  Tamilnadu  (1999)  113  STC  26  (Mad  HC  DB)  *  State  of  Tamilnadu  v. 
Kannapiran  Steel (1999) 112 STC 161 (Mad HC DB) * Wipro Ltd. v. State of Maharashtra (2004) 135 
STC  503 (Bom HC  DB).  Exemption notification cannot be amended  with retrospective  effect to curtail 
exemption - J K Udaipur Udyog v. State of Rajasthan (2003) 131 STC 176 (Raj HC DB). 
Exemption   can  be  withdrawn   by  Parliament  with  retrospective  effect  -  Exemption  given  by  a 
notification can be withdrawn by Parliament even with retrospective effect if it is against policy of legislature, as 
Parliament is supreme- RC Tobacco P Ltd. v. UOI 2005 (188) ELT 129 (SC). 
6.1-4 Different exemptions to different categories or classes permissible 
 
It is permissible to grant di fferent exemptions to di fferent classes, as long as a l those within a particular class 
are treated equa ly and uniformly. Statute can be declared invalid only when it is shown that the impugned 
statute is based on discrimination and that such discrimination is not referable to any classification which is 
rational and which has nexus with the object intended to be achieved by the Statute. 
Thus, granting exemption to sma l scale units, or to units manufacturing goods without aid of power, or to 
Government undertakings or to a class of consumers will be permissible. However, such classification should 
be in public interest and powers should be used bona fide. 
It is  we l recognised  that  State  enjoys  the  widest  latitude  where  measures  of economic  regulations  are 
concerned. State can pick and choose districts, objects, persons, methods and even rate for taxation if it does 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
so reasonably. 
 
6.1-5 Recovery if post clearance conditions of exemption notification not complied with 
 
In Bombay Hospital Trust v. CC 2005 (188) ELT 374 (CESTAT 5 member LB), appe lant imported medial 
equipment at concessional rate of customs duty, subject to certain conditions to be fulfi led after their import. It 
was held that this is a case of continuous obligation and there is no time limit for raising demand in such case. It 
was also held that in such case demand is not u/s 28 of Customs Act (para lel section 11A of CEA), but under 
charging section of section 12 of Customs  Act (para lel section 3 of CEA)  and  the relevant  exemption 
notification, even if no bond was executed at the time of import. 
In Sunitidevi Singhania Hospital v. CC (2015) 317 ELT 81 (CESTAT), it was held that non-fulfilment of 
post import obligation is continuing obligation. Confiscation, fine and penalty can be imposed. 
6.1-6 Public Interest is essential 
 
The exemption notification can be issued only in public interest. Public interest means greatest happiness of 
greatest number. It is not necessary to disclose the exact nature of public interest of each notification. In India 
Cement v. State of AP (1988) 69 STC 305 (SC) = AIR 1988 SC 567, it was observed that exercise of 
power to tax may be norma ly presumed to be in public interest. Court will presume that the notification has 
been issued in public interest. Person cha lenging the tax has the heavy burden to prove that it is not in public 
interest. 
In UOI v. Jalyan Udyog - AIR 1994 SC 88 = 1993 (68) ELT 9 (SC) = 1994 (1) SCC 319, it has been held 
that public interest is guiding factor in the notification. If public interest demands, the exemption can be given 
who ly or partly, and with or without any conditions. The condition specified can relate to a stage subsequent 
to the date of clearance, if public interest so demands. The guiding factor is 'public interest'. - quoted with 
approval in UOI v. Paliwal Electricals P Ltd. (1996) 83 ELT 241 (SC) = 13 RLT 857 (SC) = AIR 1996 
SC 3106 = 1996 AIR SCW 1570. Exemption given for a specific period can also be withdrawn earlier, if 
public interest so requires. In State of Rajasthan  v. Gopal Oil Mills (1999) 115 STC 25 (SC), it was held 
that a benefit cannot be withdrawn unless public interest is shown. 
Term 'Public interest' is not vague or uncertain - The phrase 'public interest' is not vague and indefinite. - 
* Maneka Gandhi v. UOI - (1978) 1 SCC 248 = AIR 1978 SC 597 = (1978) 2 SCR 621 (SC 7 member 
bench) * Premium Granites  v. State of Tamilnadu (1994) 2 SCC 691 = 1994 AIR SCW 2048 = AIR 
1994 SC 2233 * Orissa Textiles v. State of Orissa 2002 AIR SCW 333 (SC 5 member bench). 
 
6.2 Absolute  i.e. unconditional exemption (wholly or partly) is compulsory 
 
Explanation  to section 11(3) of CGST Act states that 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 co lect the tax on such goods or services or both in 
excess of effective rate, on such supply of goods or services or both 
There is identical provision in explanation to section 6 of IGST Act. 
 
Thus, if a notification grants unconditional exemption from whole or part of GST to certain goods or services, 
the taxable person cannot pay GST on such goods or services in excess of effective rate of GST or IGST. 
6.2-1 When payment of GST could have been beneficial 
 
A  taxable  person  may  like  to  pay  GST  on his  goods  or  services  even  if the  goods  or  services  are 
unconditiona ly exempt, if he intends to avail input tax credit. If the taxable person does not pay GST, his 
customer cannot avail input tax credit, which is ultimately a loss as chain of input tax credit is broken. 
6.2-2 Conditional exemption at option of taxable  person 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
The provision applies only in cases where exemption has been granted 'absolutely' i.e. unconditiona ly. It may 
be who ly or partly. 
Some exemptions are subject to some conditions In such cases, the taxable person may or may not avail of the 
concession or exemption. 
In Remedies (India) Pharmaceuticals v. CCE 1998(101) ELT 344 (CEGAT), it was held that benefit of a 
(conditional) exemption cannot be thrust upon an unwilling manufacturer [the words 'conditional' are not used 
in the order]. 
In CCE v. VIP Industries 1998(103) ELT 95 (CEGAT), it was held that a conditional exemption is at the 
option of assessee. - same view in Glaxo India  Ltd. v. CCE  1999(109)  ELT 211 (CEGAT)  * Ashok 
Organic Industries v. CCE 2000(122) ELT 773 (CEGAT) * Narayan  Polyplast v. CCE 2003(153) ELT 
160 (CEGAT). 
 
In Steelco Gujarat  v. CCE  2000 (122) ELT 381 (CEGAT),  the exemption notification was subject to 
condition that Cenvat credit should not be availed on inputs. The assessee did avail Cenvat. It was held that in 
such case, exemption could be denied, not the credit, i.e. assessee will be denied exemption, but he cannot be 
asked to reverse Cenvat credit. 
Exemption subject to condition that input tax credit should not be availed is conditional  and hence 
optional - If exemption is conditional, it is option of assessee. He may not fo low the condition prescribed and 
hence may pay duty e.g. a notification says : The goods and services are exempt from GST, provided that no 
input tax credit is availed. Hence, if input tax credit is availed, automatica ly, the exemption is not available and 
assessee can (in fact, has to) pay GST. 
6.2-3 Option to taxable  person if two exemption notifications available 
 
When there are two provisions under which an assessee (termed as taxable person in GST) could claim some 
benefit, it is for the assessee (termed as taxable person in GST) to choose one. -CIT v. Mahendra Mills 2000 
AIR SCW 1016 = AIR 2000 SC 1960 =243 ITR 56 = 109 Taxman 225 (SC). 
 
If assessee (termed as taxable person in GST) has option of either SSI exemption or availment of Cenvat 
credit (by paying excise duty on final product), he can choose either - CCE v. Grand Card Industries (2014) 
45 GST 356 = 44 Latest Case476 = 305 ELT 19 (Del HC DB). 
 
When two exemption notifications are available, assessee (termed as taxable person in GST) can choose any 
one. Department cannot pin down to avail exemption under a particular notification only - CCE v. Favourite 
Industries (2012) 7 SCC 153= 278 ELT 145 (SC) - affirming Favourite  Industries v. CCE (2003) 156 
ELT 802 (CEGAT). 
 
Where there are two exemption notifications that cover the goods in question, assessee (termed as taxable 
person in GST) is entitled to the benefit of that exemption notification which gives him greater relief, regardless 
of the fact that notification is general in its terms and the other notification is more specific to the goods. - HCL 
Ltd. v. CCE2001(130) ELT 405 = 76 ECC 11 (SC 3 member bench order) - quoted in ABB Ltd. v. CCE 
(2009) 21 STT 77 = 15 STR 23 (CESTAT 3 member bench) * CCE v. Modi Xerox (2012) 275 ELT 406 
(A l HC DB) * Ajay Industrial Corporation  v. CC (2015) 323 ELT 385 (CESTAT). 
If applicant is entitled to claim benefit under two di fferent notifications, he can claim more (i.e. better) benefit 
and it is the duty of authorities to grant such benefit to applicant - Share Medical Care v. UOI (2007) 4 SCC 
573 =209 ELT 321 (SC) - quoted in Coca Cola India v. CCE (2009) 22 STT 130 (Bom HC DB) * ABB 
Ltd. v. CCE (2009) 21 STT 77 = 15 STR 23 (CESTAT 3 member bench) * Semco Electrical  v. CCE 
(2010) 24 STT 508 (CESTAT SMB) * Winsome Yarns v. CCE (2015) 51 GST 649 = 59 Latest Case14 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
= 318 ELT 261 (CESTAT SMB) * Arvind Ltd. v. CCE (2016) 334 ELT 146 (CESTAT). 
 
Principle that a specific provision will override a general one does not apply to exemption notification ABB 
Ltd. v. CCE (2009) 21 STT 77 = 15 STR 23 (CESTAT 3 member bench). 
If two exemption notifications are available in respect of same product, the assessee (termed as taxable person 
in GST) may choose one which is more suitable to him. Department cannot insist that assessee (termed as 
taxable person in GST) must avail a particular notification only - CCE v. Pashwara Papers (P.) Ltd. - 1994 
(73) ELT 297 (CEGAT) - fo lowing earlier decision in CCE v. Balraj  Paper  and Straw Board Mills (P.) 
Ltd. - 1990 (47) ELT 139 (CEGAT). Similar view in CCE v. Featherlite  Corporation  - 1991 (55) ELT 
409 (CEGAT) * Ralli Machines v. CCE 1992(58) ELT 232 (CEGAT)* Indian Oil Corporation  Ltd. v. 
CCE - 1991 (53) ELT 347 (CEGAT - 3 member bench) * Prominent Plastic Industries v. CCE 1997(93) 
ELT 299 (CEGAT) * Modi Xerox Ltd. v. CCE 1997(94) ELT 139 (CEGAT) * CCE v. Classic Rugs P. 
Ltd. 1998(103) ELT 322 (CEGAT) * CCE v. Cosmos Engineers  1998(108) ELT 213 (CEGAT) * Jai 
AmbePlastex Industries v. CCE 1999(113) ELT 297 (CEGAT) * CCE v. Galaxy IndlCorpn 1999(106) 
ELT 209 (CEGAT) * CCE v. Asian Paints 1999(114) ELT 972 (CEGAT) * Mamta Cement Co. v. CCE 
2000(117) ELT 157 (CEGAT) * Indian Rayon v. CCE 2001(128) ELT 494 (CEGAT) * Waterbase Ltd. 
v. CC 2001(130) ELT 386 (CEGAT) * Gajraj  Corporation  v. CCE 2001(132) ELT 302 (CEGAT) * 
CCE  v. Power  Volts 2001(133)  ELT 612  (CEGAT)  * CCE  v. Binnay Ltd. (2001)  137  ELT  1367 
(CEGAT) * Vittal Mallya v. CC 2002(140) ELT 404 (CEGAT) * Powerica  Ltd. V. CC 2002(142) ELT 
699 (CEGAT) * Jayant  Agro Organics  v. CCE 2003 (157) ELT 684 (CESTAT) * Cipla Ltd. v. CC 
(2007) 218 ELT 547 (CESTAT)  * CC v. Christian  Medical College  Hospital  (2007) 208 ELT 531 
(CESTAT) * Hi-Tech Auto Craft  v. CCE (2008) 231 ELT 286 (CESTAT) * Parashuram Cement v. 
CCE (2009) 238 ELT 196 (CESTAT) * Arvind Ltd. v. CCE (2014) 46 GST 566 = 47 Latest Case91 
(CESTAT) * Hindalco Industries v. CCE (2015) 317 ELT77 (CESTAT). 
Even if one exemption notification is general and other notification is specific, assessee (termed as taxable 
person in GST) can opt either, which is beneficial to him. - CCE v. Maruthi Foam  1996(85) ELT 157 
(CEGAT) - fo lowed in CCE v. Bharat Seats 1999(108) ELT 847 (CEGAT). 
When more than two benefits are available, assessee (termed as taxable person in GST) can avail of either. - 
ABS Industries Ltd. v. CCE 1999 (112) ELT 854 (CEGAT). 
 
In Raman Boards Ltd. v. CCE - 1988 (36) ELT 615 (CEGAT), the assessee (termed as taxable person in 
GST) was fo lowing one exemption notification. Later he found that other notification was more beneficial. He 
was  a lowed  to  switch  to  another  notification,  subject  to  condition  that  benefit  obtained  under  earlier 
notification is paid back. 
In Everest Convertors v. CCE (1995) 80 ELT 91 (CEGAT) = 60 ECR 670, it was observed 'It does not 
require any authority to say that if a person has a choice of two benefits available to him, it is his option which 
benefit he would like to avail of'. 
6.2-4 Simultaneous availment of two exemptions permissible 
 
Two exemption notifications can operate in regard to the same factory or the same manufacturer. It is possible 
to avail benefit of first notification and then claim benefit of second notification, though not independently - Jay 
Dye Chem Industries v. CCE - 1996 (87) ELT 290 (CEGAT) [Of course, wording of notification should be 
such that it is possible]. 
In Aggarwal Rolling Mills v. CCE  1997(93)  ELT 615 (CEGAT)  and CC v. Hindustan  Motors  Ltd. 
1998(98) ELT 557 (CEGAT), it was held that benefit of two exemption notifications can be availed, unless 
contrary is specified in the notification. - same view in Hindustan Lever v. CCE 1989(40) ELT 388 (CEGAT