Clarifying on reports of a higher tax incidence on free food supplied from religious institutions, the government on Tuesday said that free food supplied in anna kshetras (food areas), run by religious institutions, has been kept out of the GST ambit.
Also, prasadam distributed by religious places of worship like temples, mosques, churches, gurdwaras and dargahs, has been exempted under Goods and Services Tax (GST).
Referring to media reports that suggested that Goods and Services Tax would be levied on free food supplied in anna kshetras run by religious institutions, a finance ministry statement said “this is completely untrue. No GST is applicable on such food supplied free”.
However, some of the inputs and input services including sugar, vegetable edible oils, ghee, butter, service for transportation of these goods etc. required for making prasadam would be subject to GST, the statement said.
The ministry said most of these inputs, or input services, have multiple uses and it is difficult to prescribe a separate rate of tax for sugar, etc. when supplied for a particular purpose under the GST regime.
“GST, being a multi-stage tax, end use based exemptions or concessions are difficult to administer. Therefore, GST does not envisage end use based exemptions,” the statement said.
“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 finance ministry statement added.