No GST exemption on items for langar: SGPC again appeals to Centre, says quantity of food to be hit

The ministry’s press release further 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

Written by KAMALDEEP SINGH BRAR | Amritsar | Published:July 13, 2017 8:39 am
GST, Gurudwara, GST on langar items, SGPC, golden temple Golden Temple (Harmandir Sahib) in Amritsar, Punjab, India

A day after Union Finance Ministry clarified that items used to prepare food at religious community kitchens is not exempt from GST, the SGPC on Wednesday said that the new tax system will hit quantity of langar at Golden Temple and other gurdwaras under its control.

In a letter to Finance Minister Arun Jaitley on Wednesday, SGPC president Kirpal Singh Badungar said: “You are requested to consider granting exemption from GST in respect of purchase at Sri Harmandir Sahib, Amritsar, Takht Sri Keshgarh Sahib Shri Anandpur Sahib and Takht Shri Damdama Sahib Talwandi Sabo Bathinda as was being done hitherto under VAT. Otherwise, it will be really impossible for the SGPC to carry out all the services rendered to needy not only of Indian origin, but of any religion, caste, creed or country. I think Union government would not let this happen.”

Talking to The Indian Express, Badungar said: “Our source of income is offerings by devotees. If you have Rs 100 note and now after implementation of GST you are left with Rs 75, then definitely it is going to affect your budget. Langar is served continuously at gurdwaras and we cannot put any notice board that it would be available for a limited time period. We will not compromise with quality of langar. But definitely quantity is going to directly hit by GST.”

He added: “Not only Langar, we have been providing financial help to poor cancer patients. We are flooded with applications of cancer patients. With GST, all such humanitarian services are going to be hit. What will we do about poor students who come to us with hope that SGPC will pay their fee?”

In a press note on Tuesday, the Finance Ministry had said: “No GST is applicable on such food supplied for free.” While many interpreted this as Centre accepting SGPC’s demand, later the ministry clarified that there was on exemption on purchase of the food items being used in making of langar.

The ministry’s press release further 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.

“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. 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.”

Countering this explanation, Badungar argued, “The new GST Act also provides for exemption to be granted to various institutions/businesses eligible for the same in the eyes of the government. As per sub-section 11(1)of the GST Act or sub Section 6(2) of the IGST Act exemption can be granted by Centre or state government on the recommendation of GST Council.” He added, “ With shift from VAT to GST, 12 per cent will be levied on desi ghee, 18 per cent on Sugar and 5 per cent on pulses thereby increasing financial burden by Rs 9 crore annually in respect of all three gurdwaras.”

Getting exemption on GST is not only economic, but also a political issue for the SGPC, which is run by SAD (Badal). There has been a campaign on social media by some Sikh organisations against imposition of GST on SGPC purchases, with SAD being accused of failing to secure the exemption despite being part of the Union government.

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