DNA India – GST spares langar, but not ingredients

The central government on Tuesday clarified that the free food typically supplied in anna kshetras run by religious institutions would be exempt from the GST

Mansi Taneja & Srishti Choudhary

Chandigarh, Mumbai, 12 July 2017. The largest community kitchen in Golden Temple in Amritsar which was set to incur an extra financial burden of Rs 10 crore due to the Goods and Services Tax can expect some relief after the Finance Ministry exempted free food being served at gurdwaras and other places of worship from the reform measure.

The central government on Tuesday clarified that the free food typically supplied in anna kshetras (food areas) run by religious institutions would be exempt from the Goods and Services Tax (GST).

“Further, prasadam supplied by religious places like temples, mosques, churches, gurdwaras, dargahs, attracts nil Central GST and State GST or Integrated GST, as the case may be,” a Finance Ministry statement said.

The statement came after some groups including the Shromani Gurudwara Prabandhak Committee (SGPC) sought exemption from GST for inputs. Minister of Food Processing Industries Harsimrat Kaur had also last week sought exemption for purchases related to langar and other services to gurdwaras.

However, the SGPC said it was examining the decision, which does not exempt items used to prepare the food. For instance, some of the inputs and input services, such as sugar, vegetable edible oils, ghee, butter, and the service for transportation of these goods, used in the making of such offerings will remain within the ambit of GST.

“We are yet to examine the orders of the Finance Ministry, as it is learnt that inputs which are used for making langar have not been exempted, after which we will decide the course of action,” said the spokesperson of SGPC Amritsar.

“Most of these inputs or input services have multiple uses. Under the GST regime, it is difficult to prescribe a separate rate of tax for such inputs when supplied for a particular purpose,” the Ministry said, pointing out that GST does not envisage end use-based exemptions.

“GST being a multi-stage tax, end-use based exemptions or concessions are difficult to administer…. It would, therefore, not be desirable to provide end-use based exemption for inputs or input services for making prasadam or food for free distribution by religious institutions,” the statement said.

SGPC President Kirpal Singh Badungar had earlier met the Finance Minister Arun Jaitley and requested him to exempt the purchase made for langar from GST. SGPC spends over Rs 70 crore in purchasing various items for the community kitchen.

The previous SAD-BJP state government had exempted all items purchased for the langar by the SGPC, which is sustained by donations made by devotees.

“SGPC runs langar at Sri Darbar Sahab Amritsar, Sri Keshgarh Sahab Anandpur and Talwandi Sabo in Bathinda, all of which was exempted from VAT. But with GST, we would have to bear extra financial burden,” a spokesperson for the SGPC told DNA.



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