Finin2min · GST Law Library

UTGST — Section 8: Power to grant exemption from tax

Reviewed by CA Nikhil Gupta · Last reviewed 30 August 2026

Law checked: 27 Jul 2026Status: CURRENTOfficial law prevails

Finin2min Summary — Section in 2 Minutes

UTGST section 8 deals with power to grant exemption from tax.

Identify the precise enabling provision and the notification/order granting relief.
Check conditions, class of person/supply and effective dates.
Do not extend an exemption by analogy.
Preserve evidence proving every condition.

Why this section matters

This provision is part of the Union Territory Goods and Services Tax Act, 2017. It should be read as a legal decision point, not as an isolated definition: identify the factual trigger, effective date, connected subordinate law and evidence before applying it.

Current-law and effective-date control

CURRENT — Use the consolidated Act text together with subsequent subordinate law and effective-date controls.

double-check sources

India Code / official Act record
Official consolidated/Gazette Act text — source cut-off noted as 27 June 2025

official statutory reference

8. Power to grant exemption from tax.—(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.

1. Subs. by Act 33 of 2018, s. 2 for sub-section (4) (w.e.f. 1-2-2019)

      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.

Clause-by-clause Finin2min decode

Trigger: identify the facts that bring section 8 into play.
Legal consequence: apply the operative words of “Power to grant exemption from tax” rather than a commercial label.
Subordinate-law layer: test Rules, Forms, notifications, rate instruments or portal procedure authorised by the Act.
Evidence layer: preserve records capable of proving each statutory condition and the relevant date.

Act–Rule–Form–Notification bridge

Finin2min decision path

Identify the precise enabling provision and the notification/order granting relief.
Check conditions, class of person/supply and effective dates.
Do not extend an exemption by analogy.
Preserve evidence proving every condition.

Practical case studies

Case 1

A notification grants conditional relief—failure of one condition can change the entire tax result.

Case 2

A general practice non-recovery provision requires the statutory/notification trigger; it is not a discretionary waiver.

Case 3

An exemption changed during the contract—apply the date-specific instrument.

Accounting, ERP & portal touchpoints

Use a tax code that reflects the correct statute/head and effective date; ERP labels cannot override the Act.
Reconcile statutory classification to invoice/return/payment data and preserve system audit trails.
Where portal functionality implements the provision, retain acknowledgements, ARN/challan/order references and downloaded evidence.

Notice, litigation & evidence risk

Do not rely on a current summary for an earlier tax period without checking the historical amendment position.
Distinguish binding Supreme Court/High Court/GSTAT decisions from fact-specific AAR/AAAR outcomes.
Preserve contemporaneous documents; post-facto explanations are weaker than transaction-time evidence.

Common mistakes to avoid

Reading the section without its effective-date or commencement status.
Using a GST Council recommendation as though it were a notified law.
Stopping at the Act and ignoring the Rule/Form/notification that controls implementation.
Assuming a portal outcome itself proves the legal position.

Questions professionals actually ask

What does UTGST section 8 cover?

It covers Power to grant exemption from tax. Start with the statutory text, then apply the linked Rules/notifications and the factual trigger.

What date should I test?

Use the transaction, tax period, machine/process, order or filing date relevant to the issue. Current wording must not be back-cast into an earlier period.

Can I rely only on this summary?

No. Finin2min explains the provision, but the official Act, Rules, notifications and judicial position control the legal outcome.

What evidence should I retain?

Keep source documents proving the factual trigger, computation, filing/payment, portal acknowledgement and any officer communication relevant to the provision.

Finin2min evidence checklist

Official Act version and amendment trail saved for the relevant date.
Contract/invoice/transaction or machine/process records supporting the factual trigger.
Return/payment/refund/appeal records where applicable.
Portal acknowledgements and officer communications.
Working paper documenting why this provision and not an alternative provision applies.