No GST on langar, ‘prasad’: Finance ministry

The GST was rolled out in the country on July 1 to introduce a uniform indirect tax system by subsuming various central, state and local indirect taxes and levies.
The Union government on Tuesday said free food supplied at community kitchens run by religious institutions has been kept outside the ambit of the Goods and Services Tax (GST).
Also, ‘prasad’ distributed by places of worship like temples, gurdwaras, mosques, churches and dargahs will not attract any tax.
The GST was rolled out in the country on July 1 to introduce a uniform indirect tax system by subsuming various central, state and local indirect taxes and levies.
Issuing a clarification on media reports that suggested that the GST would be levied on free food supplied in ‘anna kshetras’ (food areas) by religious institutions, a finance ministry said: “This is completely untrue. No GST is applicable on such food supplied free.”
Earlier, on July 2, Union food and processing minister and Akali leader Harsimrat Kaur Badal had urged finance minister Arun Jaitley to exempt all purchases made by the Shiromani Gurdwara Parbandhak Committee (SGPC) for ‘langar sewa’ or service at the community kitchen from the GST.
The SGPC spends around Rs 75 crore to purchase desi ghee, sugar and pulses, all used in the preparation of food served in the Golden Temple in Amritsar. Citing this, the minister said the committee would have to bear a financial burden of Rs 10 crore on purchases, as they come under the 5-18% GST bracket.
However, the ministry’s statement said some of the inputs and input services required for making ‘prasad’ would be subject to the GST. These include sugar, vegetable edible oils, ghee, butter and service for transportation of these goods.
The ministry said 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 say sugar, when supplied for a particular purpose.
“With the GST being a multistage tax, end use-based exemptions or concessions are difficult to administer,” said the ministry. “It would, therefore, not be desirable to provide end use-based exemption for inputs or input services for making prasada or food for free distribution by religious institutions.”