GST would have been charged, collected and deposited along with claim of ITC. If the exemption was absolute, explanation to section 11 makes it clear that the exemption must be availed. In case of omission to avail exemption, the tax charged and collected being ‘in the name of GST’ is liable to be paid to the Government under section 76. More importantly, the ITC availed in error will also be denied.
(ICAI FAQ PUBLICATION 06-09-2017 EXEMPTION: FAQ NO. 10)