Why the Shiromani Gurdwara Parbandhak Committee thinks GST is an unfair burden

The most expensive commodity that the Golden Temple kitchen purchases is desi ghee — around Rs 4 lakh worth of desi ghee is used in the kitchen every day. At the rate of 12%, the GST on ghee alone will work out to Rs 1.75 crore, the SGPC has calculated.

Written by KAMALDEEP SINGH BRAR | Updated: July 27, 2017 1:16 am
Shiromani Gurdwara Parbandhak Committee, Golden Temple, GST, GST temples, Gurdwaras, Gurdwaras GST, Langar, Langar GST, Indian Express Almost 70,000 people have langar at Golden Temple daily. SGPC says it’s a charitable body and must get tax breaks. (Express Photo/ Prabal Mandal)

The Shiromani Gurdwara Parbandhak Committee has been protesting against the anticipated Rs 10 crore annual GST burden on the langar sewa in gurdwaras. What are its arguments? How much does the Committee earn, and from where? The Indian Express explains.

Where and how much does the Shiromani Gurdwara Parbandhak Committee (SGPC) spend every year?

On March 29, the SGPC general house passed a budget of Rs 1,106 crore for 2017-18, about 4% more than its 2016-17 budget of Rs 1,064 crore. Rs 115 crore was earmarked for salaries, pensions and the general running of its offices; Rs 73 crore for the Dharam Parchar Committee which is responsible for the propagation of the religion; Rs 33 crore for SGPC-run educational institutions; and Rs 30 crore for the Golden Temple langar. SGPC is the custodian of gurdwaras in Punjab, Haryana, Himachal Pradesh and Chandigarh, and Rs 650 crore was budgeted for those.

What are the sources of the SGPC’s income?

The biggest source is offerings of devotees at the 79 gurdwaras it controls directly and the 87 others attached to it. Gurdwaras collectively own around 14,000 acres of agricultural land, which yield a significant rent. SGPC and the gurdwaras are in a federal economic structure — the gurdwaras plan individual annual budgets, which are made part of the annual budget presented to the SGPC house by the Committee general secretary. The larger gurdwaras are required to contribute more — in general, the SGPC claims between 37% and 50% of the gurdwaras’ income. The accounts of the SGPC’s gurdwaras were last audited in 2012. Accounts of SGPC-run schools and colleges are audited annually.

If SGPC has an annual budget of over Rs 1,100 crore, why is it upset about paying a GST of just Rs 10 crore?

SGPC wants a GST exemption on purchases made for the community kitchens of three gurdwaras in Punjab. These three gurdwaras — Golden Temple, Amritsar; Takht Keshgarh Sahib, Anandpur Sahib; and Takht Damdama Sahib, Talwandi Sabo, Bathinda — were exempt from VAT in the earlier tax structure. SGPC has calculated that the GST burden now on the kitchens of these gurdwaras will be Rs 10 crore. The other gurdwaras were paying VAT earlier, and there has been no demand to exempt them from GST.

SGPC argues that it is a charitable organisation, and should not be taxed on langars at the three gurdwaras. It is the principle, not the quantum of tax that is important, it says.

“We haven’t asked for something new. We already had exemption from paying VAT. The government had considered all the facts before providing us relief. We just want the government to not take away the relief that we had in the earlier system,” SGPC Chief Secretary Harcharan Singh said.

“We are a charitable organisation. Almost 70,000 people have langar every day at the Golden Temple alone. We spend almost all our money on the welfare of the needy, and to provide education. Our main source of income is offerings of devotees. We are not running a company,” Harcharan Singh said.

The SGPC, he said, had always come forward at the call of society, be it during the floods in Kashmir, or during other tragedies elsewhere. “We ran langars for villagers who were asked to leave their homes in the border areas after the surgical strikes. We do not differentiate on the basis of religion, caste and creed while providing services. We must be exempted from paying unwarranted taxes.”

SGPC President Kirpal Singh Badungar said, “Let me ask you a counter-question. What is Rs 10 crore for the Government of India? Our budget is definitely smaller than theirs, and Rs 10 crore definitely matter to us.”

The SGPC has written to Finance Minister Arun Jaitley stating its case, and Badungar, who is also a member of the core committee of the Shiromani Akali Dal (Badal), has written to his party’s political rival, Punjab Chief Minister Captain Amarinder Singh seeking exemption from at least the state component of the GST demand.

How exactly will the langar be affected by the imposition of GST?

As mentioned above, the Golden Temple will spend Rs 30 crore on the community kitchen during this financial year. The most expensive commodity that the Golden Temple kitchen purchases is desi ghee — around Rs 4 lakh worth of desi ghee is used in the kitchen every day. At the rate of 12%, the GST on ghee alone will work out to Rs 1.75 crore, the SGPC has calculated. It has reached the figure of Rs 10 crore by similarly calculating the GST on other purchases as well, for the Golden Temple and the other two gurdwaras.

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  1. V
    vishnu
    Jul 27, 2017 at 11:25 pm
    A simple solution is to allow a tax credit on taxes "paid" by the religious ins utions. Every year, SGPC can file a tax return and get money back on all the taxes "actually paid". This can be allowed to all religious ins utions. Not only will this improve transparency but it would be practical. For example, currently, there is no GST on Prasad. How does a sweet shop owner determine that one is buying sweet for Prasad or home consumption?
    Reply
  2. A
    Ashutosh Kumar
    Jul 27, 2017 at 9:38 pm
    There is GST in almost all of the western world. There are any number of Gurdwaras too. But no agitation against GST there. WHY, Sir, WHY?? Simple - every citizen there realises that paying your due share of taxes is a duty inviolate. This business of "exemptions" on one excuse or the other is the root cause of all tax evasion. The SGPC, for example, is awash with funds yet they want us (Non SGPC devotees) to carry the extra burden of Taxes. I for one call it unfair and discriminatory. Let us perform with a smile our duty by paying all specified taxes thereby helping the poorer brethren.
    Reply
  3. A
    Ashutosh
    Jul 27, 2017 at 8:28 pm
    I think in India paying tax is also a charity - as the Payer rarely receives anything in return - at least at the Langar one has the Prasadam
    Reply
  4. I
    i
    Jul 27, 2017 at 7:22 pm
    Feeding to the poor by a charitable ins ution should not be taxed.....this is the norm all over the world including western countries. I urge the ministry to consider the poor and give the SGPC a tax relief.
    Reply
  5. G
    gurjeet
    Jul 27, 2017 at 1:08 am
    No tax relief to any one. Rather I. Tax should be charged
    Reply
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