Various tax systems grant a tax exemption to certain organizations, persons, income, property or

other items taxable under the system. Tax exemption may also refer to a personal allowance or
specific monetary exemption which may be claimed by an individual to reduce taxable income
under some systems. Tax exempt status may provide a potential taxpayer complete relief from
tax, tax at a reduced rate, or tax on only a portion of the items subject to tax. Examples include
exemption of charitable organizations from property taxes and income taxes, exemptions
provided to veterans, and exemptions under cross-border or multi-jurisdictional principles. Tax
exemption generally refers to a statutory exception to a general rule rather than the mere absence
of taxation in particular circumstances (i.e., an exclusion). Tax exemption also generally refers to
removal from taxation of a particular item or class rather than a reduction of taxable items by
way of deduction of other items (i.e., a deduction). Tax exemptions may theoretically be granted
at any governmental level that imposes taxation, though in some
The Goods and Services Tax (GST) is a value added tax to be implemented in India [1]Not
decided.[2] It will replace all indirect taxes levied on goods and services by the Indian Central
and State governments. It is aimed at being comprehensive for most goods and services with few
tax exemption.
India is a federal republic, and the GST will thus be implemented concurrently by the central and
state governments as the Central GST and the State GST respectively.[3] Exports will be zerorated and imports will be levied the same taxes as domestic goods and services adhering to the
destination principle.
broader systems restraints are imposed on such exemptions by lower tier
governmental uni

A subsidy is an assistance paid to a business or economic sector. Most subsidies are made
by the government to producers or distributed as subventions in an industry to prevent the
decline of that industry (e.g., as a result of continuous unprofitable operations) or an increase in
the prices of its products or simply to encourage it to hire more labor (as in the case of a wage
subsidy). Examples are subsidies to encourage the sale of exports; subsidies on some foods to
keep down the cost of living, especially in urban areas; and subsidies to encourage the expansion
of farm production and achieve self-reliance in food production.[1]
Subsidy has been used by economists with different meanings and connotations in different
contexts. The dictionary [Concise Oxford] defines it as "money granted by state, public body,
etc., to keep down the prices of commodities, etc.. Environmental economists define subsidies
as uncompensated environmental damage arising from any flow of goods and services. In a
budgetary context, it may be defined as unrecovered costs in the public provision of private
goods. [2]

Subsidies can be regarded as a form of protectionism or trade barrier by making domestic goods
and services artificially competitive against imports. Subsidies may distort markets, and can
impose large economic costs.[3] Financial assistance in the form of a subsidy may come from
one's government, but the term subsidy may also refer to assistance granted by others, such as
individuals or non-governmental institutions.