BBA Semester 6

GST
Unit 1
 INTRODUCTION

Goods and Services Tax (GST) is an indirect tax (or consumption tax)
used in India on the supply of goods and services. It is a comprehensive,
multistage, destination-based tax: comprehensive because it has subsumed
almost all the indirect taxes except a few state taxes. Multi-staged as it is, the
GST is imposed at every step in the production process, but is meant to be
refunded to all parties in the various stages of production other than the final
consumer and as a destination-based tax, it is collected from point of
consumption and not point of origin like previous taxes.

Goods and services are divided into five different tax slabs for collection
of tax: 0%, 5%, 12%, 18% and 28%. However, petroleum products, alcoholic
drinks, and electricity are not taxed under GST and instead are taxed separately
by the individual state governments, as per the previous tax system. There is a
special rate of 0.25% on rough precious and semi-precious stones and 3% on
gold. In addition a cess of 22% or other rates on top of 28% GST applies on few
items like aerated drinks, luxury cars and tobacco products. Pre-GST, the
statutory tax rate for most goods was about 26.5%, Post-GST, most goods are
expected to be in the 18% tax range.
The tax came into effect from 1 July 2017. The GST replaced existing
multiple taxes levied by the central and state governments.

 History of GST
GST was first implemented as a tax regime in 1954 in France and
subsequently adopted by several countries including Australia, Canada, UK,
Spain, Vietnam etc.
On July 1st 2017, the Goods and Services Tax was implemented in India.
But, the process of implementing the new tax regime commenced a long time
ago. In 2000, Atal Bihari Vajpayee, then Prime Minister of India, set up a

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committee to draft the GST law. In 2004, a task force concluded that the new
tax structure should be put in place to enhance the tax regime at the time.

In 2006, the Finance Minister proposed the introduction of GST from 1st
April 2010 and in 2011 the Constitution Amendment Bill passed to enable the
introduction of the GST law. In 2012, the Standing Committee started
discussions about GST, and tabled its report on GST a year later. In 2014, the
new Finance Minister at the time, Arun Jaitley, reintroduced the GST bill in
Parliament and passed the bill in Lok Sabha in 2015. Yet, the implementation of
the law was delayed as it was not passed in Rajya Sabha.

GST went live in 2016, and the amended model GST law passed in both
the houses. The President of India also gave assent. In 2017 the passing of 4
supplementary GST Bills in Lok Sabha as well as the approval of the same by
the Cabinet. Rajya Sabha then passed 4 supplementary GST Bills and the new
tax regime implemented on 1st July 2017.

Upon implantation the GST replaced the following central taxes:

• Service Tax
• Duties Of Excise
• Central Excise Duties
• Cess And Surcharge
• Additional Duties Of Excise
• Additional Duties Of Customs
• Additional Duty Of Customs

GST services also subsumed the following state taxes:

• Entry Tax
• Purchase Tax
• Luxury Tax
• State VAT
• Central sales tax
• Entertainment Tax
• Taxes on Advertisements
• State Cesses and Surcharges

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• Taxes on gambling and lottery

 Types of GST in India

The four different types of GST are given below:

1. Central Goods and Services Tax :

CGST is charged on the intra state supply of products and services.
2. State Goods and Services Tax :
SGST, like CGST, is charged on the sale of products or services within a
state.
3. Integrated Goods and Services Tax :
IGST is charged on inter-state transactions of products and services.
4. Union Territory Goods and Services Tax :
UTGST is levied on the supply of products and services in any of the
Union Territories in the country, viz. Andaman and Nicobar Islands, Daman and
Diu, Dadra and Nagar Haveli, Lakshadweep, and Chandigarh. UTGST is levied
along with CGST.

 Objectives of GST

1. To achieve the ideology of ‘One Nation, One Tax’

GST has replaced multiple indirect taxes, which were existing under the
previous tax regime. The advantage of having one single tax means every state
follows the same rate for a particular product or service. Tax administration is
easier with the Central Government deciding the rates and policies. Common
laws can be introduced, such as e-way bills for goods transport and e-invoicing
for transaction reporting. Tax compliance is also better as taxpayers are not

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bogged down with multiple return forms and deadlines. Overall, it’s a unified
system of indirect tax compliance.

2. To subsume a majority of the indirect taxes in India

India had several erstwhile indirect taxes such as service tax, Value Added
Tax (VAT), Central Excise, etc., which used to be levied at multiple supply
chain stages. Some taxes were governed by the states and some by the Centre.
There was no unified and centralised tax on both goods and services. Hence,
GST was introduced. Under GST, all the major indirect taxes were subsumed
into one. It has greatly reduced the compliance burden on taxpayers and eased
tax administration for the government.

3. To eliminate the cascading effect of taxes

One of the primary objectives of GST was to remove the cascading effect of
taxes. Previously, due to different indirect tax laws, taxpayers could not set off
the tax credits of one tax against the other. For example, the excise duties paid
during manufacture could not be set off against the VAT payable during the
sale. This led to a cascading effect of taxes. Under GST, the tax levy is only on
the net value added at each stage of the supply chain. This has helped eliminate
the cascading effect of taxes and contributed to the seamless flow of input tax
credits across both goods and services.

4. To curb tax evasion

GST laws in India are far more stringent compared to any of the erstwhile
indirect tax laws. Under GST, taxpayers can claim an input tax credit only on
invoices uploaded by their respective suppliers. This way, the chances of
claiming input tax credits on fake invoices are minimal. The introduction of e-
invoicing has further reinforced this objective. Also, due to GST being a
nationwide tax and having a centralised surveillance system, the clampdown on
defaulters is quicker and far more efficient. Hence, GST has curbed tax evasion
and minimised tax fraud from taking place to a large extent.

5. To increase the taxpayer base

GST has helped in widening the tax base in India. Previously, each of the tax
laws had a different threshold limit for registration based on turnover. As GST
is a consolidated tax levied on both goods and services both, it has increased
tax-registered businesses. Besides, the stricter laws surrounding input tax credits

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have helped bring certain unorganised sectors under the tax net. For example,
the construction industry in India.

6. Online procedures for ease of doing business

Previously, taxpayers faced a lot of hardships dealing with different tax
authorities under each tax law. Besides, while return filing was online, most of
the assessment and refund procedures took place offline. Now, GST procedures
are carried out almost entirely online. Everything is done with a click of a
button, from registration to return filing to refunds to e-way bill generation. It
has contributed to the overall ease of doing business in India and simplified
taxpayer compliance to a massive extent. The government also plans to
introduce a centralised portal soon for all indirect tax compliance such as e-
invoicing, e-way bills and GST return filing.

7. An improved logistics and distribution system

A single indirect tax system reduces the need for multiple documentation for
the supply of goods. GST minimises transportation cycle times, improves
supply chain and turnaround time, and leads to warehouse consolidation, among
other benefits. With the e-way bill system under GST, the removal of interstate
checkpoints is most beneficial to the sector in improving transit and destination
efficiency. Ultimately, it helps in cutting down the high logistics and
warehousing costs.

8. To promote competitive pricing and increase consumption

Introducing GST has also led to an increase in consumption and indirect tax
revenues. Due to the cascading effect of taxes under the previous regime, the
prices of goods in India were higher than in global markets. Even between
states, the lower VAT rates in certain states led to an imbalance of purchases in
these states. Having uniform GST rates have contributed to overall competitive
pricing across India and on the global front. This has hence increased
consumption and led to higher revenues, which has been another important
objective achieved.

 The benefits of Goods and Service Tax (GST)

GST is beneficial not only for the business and industry but also for the
government and consumers. Here, we bring the ten benefits of Goods and
Service Tax (GST).
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1. Easy compliance:
A robust and comprehensive IT system would be the foundation of the
GST regime in India. Therefore, all taxpayer services such as registrations,
returns, payments, etc. would be available to the taxpayers online, which would
make compliance easy and transparent.

2. Uniformity of tax rates and structures:

GST will ensure that indirect tax rates and structures are common across
the country, thereby increasing certainty and ease of doing business. In other
words, GST would make doing business in the country tax neutral, irrespective
of the choice of place of doing business.

3. Removal of cascading:
A system of seamless tax credits throughout the value-chain, and across
boundaries of States, would ensure that there is minimal cascading of taxes.
This would reduce the hidden costs of doing business.

4. Improved competitiveness:
Reduction in transaction costs of doing business would eventually lead to
improved competitiveness for the trade and industry. World Bank believes that
the implementation of the Goods and Service Tax (GST), combined with the
dismantling of inter-state check-posts, is the most crucial reform that could
improve the competitiveness of India’s manufacturing sector.

5. Gain to manufacturers and exporters:

The subsuming of major Central and State taxes in GST, complete and
comprehensive set-off of input goods and services and phasing out of Central
Sales Tax (CST) would reduce the cost of locally manufactured goods and
services. This will increase the competitiveness of Indian goods and services in
the international market and give a boost to Indian exports. The uniformity in
tax rates and procedures across the country will also go a long way in reducing
compliance costs.

6. Simple and easy to administer:

Multiple indirect taxes at the Central and State levels are being replaced
by GST. Backed with a robust end-to-end IT system, GST would be simpler and

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easier to administer than all other indirect taxes of the Centre and State levied so
far.

7. Better controls on leakage:

GST will result in better tax compliance due to a robust IT infrastructure.
Due to the seamless transfer of input tax credit from one stage to another in the
chain of value addition, there is an in-built mechanism in the design of GST that
would incentivize tax compliance by traders.

8. Higher revenue efficiency:

GST is expected to decrease the cost of collection of tax revenues of the
Government, and will, therefore, lead to higher revenue efficiency.

9. Single and transparent tax proportionate to the value of goods and

services:
Due to multiple indirect taxes being levied by the Centre and State, with
incomplete or no input tax credits available at progressive stages of value
addition, the cost of most goods and services in the country today is laden with
many hidden taxes. Under GST, there would be only one tax from the
manufacturer to the consumer, leading to transparency of taxes paid to the final
consumer.

10. Relief in the overall tax burden:

Credits of input taxes paid at each stage will be available in the
subsequent stage of value addition, which makes GST essentially a tax only on
value addition at each stage. Because of efficiency gains and the prevention of
leakages, the overall tax burden on most commodities will come down, which
will benefit consumers. The final consumer will thus bear only the GST charged
by the last dealer in the supply chain, with set-off benefits at all the previous
stages.

 Officers under GST Act

As per section 3 of CGST Act. the Government shall, by notification, appoint

the following classes of officers for the purposes of this Act, namely: ––

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(a) Principal Chief Commissioners of Central Tax or Principal Directors
General of Central Tax,

(b) Chief Commissioners of Central Tax or Directors General of Central Tax,

(c) Principal Commissioners of Central Tax or Principal Additional Directors

General of Central Tax,

(d) Commissioners of Central Tax or Additional Directors General of Central

Tax,

(e) Additional Commissioners of Central Tax or Additional Directors of Central

Tax,

(f) Joint Commissioners of Central Tax or Joint Directors of Central Tax,

(g) Deputy Commissioners of Central Tax or Deputy Directors of Central Tax,

(h) Assistant Commissioners of Central Tax or Assistant Directors of Central

Tax, and

(i) any other class of officers as it may deem fit:

Provided that the officers appointed under the Central Excise Act, 1944 shall be
deemed to be the officers appointed under the provisions of this Act.

 Powers of GST Officers

Every GST taxpayer must know about the powers of the GST officers as this
will help them approach the proper officer at the right time. Also, this will help
to save the valuable time that they might lose by approaching the wrong GST
officer, including any illegal exploitation by the GST officers. It also protects
the GST taxpayer from any misguided inquiry and assessment. In this article,
we will discuss the powers of officers under GST Act, what are the powers of
SGST officers / CGST officers, specific GST superintendent powers, and
general powers of GST officers. Here we will also discuss the Power of GST
officer delegated by the Commissioner or Additional Commissioner.

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 1. Legal Provision
Appointment powers of GST Like powers given to the different officers
under the different types of Laws, the GST law also granted specific Power of
officers under GST. As per Section 5 of the CGST Act, 2017, GST officers
have been given powers that each officer may exercise, subject to the conditions
and limitations as may be imposed by the board. It also permits a commissioner
to delegate his powers to any other officer who is a subordinate to him. One
question that may arise is ―what are the powers of SGST officers?. The answer
is all powers given under CGST Act shall mutatis mutandis given to the SGST
officers under SGST Act, 2017. If we talk about the specific powers of officers
under the GST Act, the following are the leading powers of GST authorities
officers.

2. Power of Inspection
The GST authorities and their powers officer not below the rank of Joint
Commissioner may authorize any proper officer who can inspect any business
place of the taxable person, transporter, business owner, warehouse operator, or
any other person. But the person reviewing the above shall have written
authorization from the officer not be below the rank of Joint Commissioner.
They can inspect any GST taxpayer’s premises at any time but with written
permission from the officer not below the rank of joint Commissioner. They can
inspect their business place, goods and supply, and also transport.

3. Power of Search and Seizure

The GST officer not below the rank of Joint Commissioner has the power
to search and seize any goods if he believes that any goods, documents, or
information relevant to the proceedings are hidden or not disclosed after seeking
such information. It may also authorize the proper officer to search and seize
such goods, documents, information at any place. The GST officers have the
power to search and seize any goods or any documents or information which
will be helpful for the legal proceedings. It shall be noted that search and seizure
can only be carried out by any officer who has authorization from the officer not
below the rank of Joint Commissioner.

4. Power to Arrest
GST officers can arrest the people who do not follow the rules of his law,
or if the taxpayer commits any offence, they have the Power to ask for all the

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documents and evidence of goods/services if necessary. Suppose the
Commissioner has reason to believe that a taxpayer has committed an offence
that is punishable under the CGST Act. In that case, he may authorize any
proper officer to arrest such a person. Provided the detained person should be
informed about grounds of arrest and be produced before the magistrate within
24 hours of his arrest.

5. Power to Summon Persons to Give Evidence and Produce Documents

The commission may authorize any GST officer on his behalf to summon
any person whose attendance he considers necessary to give evidence or
produce a document or any other thing in any proceedings or inquiry that such
officer is carrying out for any of the purposes of this Act.

6. Power to access Business Premises

The GST officer authorized by the Additional/Joint Commissioner of
CGST shall have access to any place of business of a registered taxable person.
This Power is given to GST officers to carry out an audit, scrutiny, and checks
to protect revenue interest. So as per this, the GST officer can inspect books of
accounts, computers, documents, computer programs or software, and other
things he may think necessary, available at such places.

7. Revisional Powers
The Chief Commissioner or Commissioner who may be on Suo-moto or
upon information received by him may call for and examine the record of any
proceeding. And if he considers that any decision or order passed under this Act
by any officer subordinate to him is erroneous may pass an order of inquiry or
modify/revise the decision or orders. But before doing so, an opportunity of
being heard will be given to such taxpayers.

8. Power to Enable Officers to Implement the Law

GST officers have various powers within their hands to implement GST
in India properly and to reduce tax evasion. But these powers are sometimes
misused, and considering this, we can say that absolute power to anyone’s hand
corrupts him absolutely.

9. Power to impose penalty

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 Under the CGST Act, 2017, if the proper officer believes that the person
is liable to a penalty which is not covered by Section 62, 63, 64, 73, 74, 129,
130 of the Act, the proper office may issue an order levying penalty on such
person after giving him an opportunity of being heard.

10.Power to Collect Statistics

The GST officer authorized by the Commissioner may on his behalf
collect data if he finds it necessary for the administration of the Act. The
authorized may call upon all the concerned taxpayers to furnish all the
information relating to GST, such as GST returns. The GST officer authorized
by the Commissioner may on his behalf collect data if he finds it necessary for
the administration of the Act. The authorized person may call upon all the
concerned taxpayers to furnish all the information relating to GST, such as GST
returns.

General Powers
Here is the list of some cases under GST that may require the GST officer
to exercise their powers:

● Supplies any goods and services without the issue of any invoice
● Intentionally declares the description of the supply on the invoice
wrongly to evade tax
● Issues any invoice or bill without supply of goods and services to claim
ITC or refund
● Collects any amount as tax but fails to pay the same to the credit of the
appropriate Government beyond a period of 3 months from the date on
which such payment becomes due
● Avails or use Input Tax Credit without actual receipt of goods and
services either fully or partially
The above-discussed powers are the critical powers that have been specified
under GST Act, and for the GST officers, there are other general powers as well
which are conferred on the proper officers. However, it is also crucial that the
officers should use such powers judiciously.

 Appointment of Officers under GST

Section 4 of CGST Act.

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(1) The Board may, in addition to the officers as may be notified by the
Government under section 3, appoint such persons as it may think fit to be the
officers under this Act.

(2) Without prejudice to the provisions of sub-section (1), the Board may, by
order, authorise any officer referred to in clauses (a) to (h) of section 3 to
appoint officers of

central tax below the rank of Assistant Commissioner of central tax for the
administration of this Act.

 Scope of supply
What is the supply under GST?
Supply includes sale, transfer, exchange, barter, license, rental, lease and
disposal. If a person undertakes either of these transactions during the course or
furtherance of business for consideration, it will be covered under the meaning
of Supply under GST.

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Elements of Supply
Supply has two important elements:

● Supply is done for a consideration

● Supply is done in course of furtherance of business

Examples:

● Mr. A buys a table for Rs.10,000 for his personal use and sells it off after
10 months of use to a dealer. This is not considered as supply under
CGST as this is not done by Mr A for the furtherance of business
● Mrs. B provides free coaching to neighbouring students as a hobby. This
is not considered as supply as this act is not performed for a
consideration.

Scope of Supplies
Activities treated as neither Supply of Goods nor as Supply of Services
(Schedule III).

● Services by an employee to the employer in the course of the

relation of employment.
● Services by any court or Tribunal established under any law for the
time being in force.
● Functions performed by members of Parliament, State Legislatures,
Panchayats, Municipalities, Local Authorities, in pursuance of the
Constitution.
● Sale of land or building.
● Services of funeral, burial, crematorium, or mortuary, including
transportation of the deceased.
● Actionable claims other than lottery, betting, and gambling.
● Supply of Goods from one non-taxable territory to another taxable
territory without the goods entering into India.
● Supply of goods from the port to any place before clearance for
Home Consumption.

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  Classification of supply and types
Composite supply and Mixed Supply:
There are a few supplies which are made together with two or more
items. Such supplies are further classified into Composite Supply and Mixed
Supply.

A supply comprising two or more goods/services, which are necessarily

supplied in conjunction with each other as per frequent business practices
followed in that area. In other words, these items cannot be supplied
individually. There is a principal supply and a secondary supply in the whole
transaction. In such cases, the tax rate on principal supply will apply to the
entire supply. E.g. Buying a Dry Fruit Gift Box for Diwali. It includes dry
fruits, a box, and a wrapper. Box and wrapper cannot be sold individually
without the main content which is dry fruit. This is a composite supply.

A supply comprising of two or more goods/services, wherein the supplies

are independent of each other and are not necessarily required to be sold
together is called a mixed supply. The first condition to be met for mixed supply
is that ‘it should not be a composite supply’. In such cases, the tax rate that is
higher of the two supplies will be applicable to the entire supply. E.g Buying a
Christmas package consisting of cakes, aerated drinks, chocolates, Santa caps,
and other gift items. Each of these items can be sold separately and are not
dependent on each other. This is a mixed supply.

 LEVY AND COLLECTION

(1) Subject to the provisions of sub-section (2), there shall be levied a tax called
the central goods and services tax on all intra-State supplies of goods or services
or both, except on the supply of alcoholic liquor for human consumption, on the
value determined under section 15 and at such rates, not exceeding twenty per
cent., as may be notified by the Government on the recommendations of the
Council and collected in such manner as may be prescribed and shall be paid by
the taxable person.

(2) The central tax on the supply of petroleum crude, high speed diesel, motor
spirit (commonly known as petrol), natural gas and aviation turbine fuel shall be

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levied with effect from such date as may be notified by the Government on the
recommendations of the Council.

(3) The Government may, on the recommendations of the Council, by

notification, specify categories of supply of goods or services or both, the tax on
which shall be paid on reverse charge basis by the recipient of such goods or
services or both and all the Provisions of this Act shall apply to such recipient
as if he is the person liable for paying the tax in relation to the supply of such
goods or services or both.

(4) The central tax in respect of the supply of taxable goods or services or both
by a Supplier, who is not registered, to a registered person shall be paid by such
person on reverse charge basis as the recipient and all the provisions of this Act
shall apply to such recipient as if he is the person liable for paying the tax in
relation to the supply of such goods or services or both.

(5) The Government may, on the recommendations of the Council, by

notification, specify categories of services the tax on intra-State supplies of
which shall be paid by the electronic commerce operator if such services are
supplied through it, and all the provisions of this Act shall apply to such
electronic commerce operator as if he is the supplier liable for paying the tax in
relation to the supply of such services:

Provided that where an electronic commerce operator does not have a physical
presence in the taxable territory, any person representing such electronic
commerce
operator for any purpose in the taxable territory shall be liable to pay tax:

Provided further that where an electronic commerce operator does not have a
physical presence in the taxable territory and also he does not have a
representative in the said territory, such electronic commerce operator shall
appoint a person in the taxable territory for the purpose of paying tax and such
person shall be liable to pay tax.

 COMPOSITION LEVY
The composition levy is an alternative method of levy of tax designed for small
taxpayers. The objective of the composition scheme is to bring simplicity and to

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reduce the compliance cost for the small taxpayers. Moreover, it is optional and
the eligible person opting to pay tax under this scheme can pay tax at a
prescribed percentage of his turnover every quarter, instead of paying tax at
normal rate.

However, to qualify for this scheme, he has to fulfill the mandatory conditions
prescribed under the law, one of which is the limit of annual turnover.

(1) Notwithstanding anything to the contrary contained in this Act but subject to
the provisions of subsections (3) and (4) of section 9, a registered person, whose
aggregate turnover in the preceding financial year did not exceed fifty lakh
rupees, may opt to pay, in lieu of the tax payable by him, an amount calculated
at such rate as may be prescribed, but not exceeding,––

(a) one per cent. of the turnover in State or turnover in Union territory in case of
a manufacturer,
(b) two and a half per cent. of the turnover in State or turnover in Union
territory in
case of persons engaged in making supplies referred to in clause (b) of
paragraph 6 of Schedule II, and
(c) half per cent. of the turnover in State or turnover in Union territory in case of
other suppliers,

subject to such conditions and restrictions as may be prescribed:

Provided that the Government may, by notification, increase the said limit of
fifty lakh rupees to such a higher amount, not exceeding one crore rupees, as
may be recommended by the Council.

(2) The registered person shall be eligible to opt under sub-section (1), if:—

(a) He is not engaged in the supply of services other than supplies referred to in
clause (b) of paragraph 6 of Schedule II;

(b) He is not engaged in making any supply of goods which are not leviable to
tax under this Act;

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(c) He is not engaged in making any inter-State outward supplies of goods;

(d) He is not engaged in making any supply of goods through an electronic

commerce operator who is required to collect tax at source under section 52;
and

(e) He is not a manufacturer of such goods as may be notified by the

Government
on the recommendations of the Council:

Provided that where more than one registered persons are having the same
Permanent Account Number (issued under the Income-tax Act, 1961), the
registered person shall not be eligible to opt for the scheme under sub-section
(1) unless all such registered persons opt to pay tax under that sub-section.

(3) The option availed of by a registered person under sub-section (1) shall
lapse with effect from the day on which his aggregate turnover during a
financial year exceeds the limit specified under sub-section (1).

(4) A taxable person to whom the provisions of sub-section (1) apply shall not
collect any tax from the recipient on supplies made by him nor shall he be
entitled to any credit of input tax.

(5) If the proper officer has reasons to believe that a taxable person has paid tax
under sub-section (1) despite not being eligible, such person shall, in addition to
any tax that may be payable by him under any other provisions of this Act, be
liable to a penalty and the provisions of section 73 or section 74 shall, mutatis
mutandis, apply for determination of tax and penalty.

 POWER TO GRANT EXEMPTION FROM TAX

(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.

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(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.

(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.

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