126. Tax exemption by the Government.—

(1) The Government may, by a notification in the official Gazette, exempt, the whole or a part of the taxes imposable under this Act, if a need arises to take immediate action to face a situation of national importance, for a specified period till the next Finance Act takes effect, but if the exemption given under this sub-section is not included in the next Finance Act, it shall automatically become ineffective.

(2) In relation to an international assistance and loan agreement, if any provision is included in such agreement for the exemption of any tax, in part or in full, on an import or a supply under such agreement, the Government may, by a notification in the official Gazette, exempt such  tax or a part thereof imposable under this Act, and

(a) in relation to import: the import shall be exempted and such exemption shall be made effective; and

(b) in relation to supply: the exemption shall be made effective by giving refund under section 71 without exempting such supply or  the person to whom such supply is made.