No GST on langar, ‘prasad’: Finance ministry

By 11th July 2017 0 Comments


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.

In the pre-GST era, Golden Temple Amritsar, Takht Damdama Sahib Talwandi Sabo, Bathinda, and Takht Keshgarh Sahib, Anandpur Sahib, were exempted from paying tax for purchasing materials to run community kitchens. Some other religious organisations in Punjab, like Durgiana Temple, too, had been given tax exemptions.
SGPC employees would give a list written on the letterhead of these gurdwaras to buy materials free of cost in the market.
The Punjab government had provided these exemptions to SGPC and other religious bodies in Punjab. All these exemptions came to an end once the Goods and Services Tax came into force. Now, the state government has no power to exempt SGPC from paying any kind of tax.
Hence, Harsimrat Kaur has shot off a separate letter to Finance Minister Arun Jaitley to resume the old exemptions under the new tax system controlled by the Centre.
Explaining the impact of GST on community kitchen, Golden Temple manager Sulakhan Singh said, “Earlier, there was 4 per cent tax on desi ghee. We were exempted from paying this tax. Now, tax on ghee under GST has been increased from 4 per cent to 12 per cent. It means now we will have to buy 50 kg ghee by paying Rs 600 more.” He added, “We were spending around Rs 75 crore annually on buying ghee, pulses, sugar, vegetables, spices, wheat, rice and other items to run the community kitchen, where more than 50,000 devotees have langar every day on an average. Now, we are being made to pay tax which is even higher than the old system.”
SAD (Badal) has been an alliance partner at the Centre and there would not only be financial but also political ramifications if SGPC failed to convince the Centre to grant exemption from paying GST.
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Posted in: Punjab