No GST on free food supplied by religious institutions, govt clarifies

New Delhi: The government today said free food supplied in anna kshetras (food areas) run by religious institutions have been kept out of the GST ambit.

Besides, prasadam distributed by religious places of worship like temples, mosques, churches, gurdwaras and dargahs, would not attract any Goods and Services Tax (GST).

Clarifying on media reports that suggested that GST 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".

Representational image

Representational image

However, some of the inputs and input services required for making prasadam would be subject to GST. These include sugar, vegetable edible oils, ghee, butter, service for transportation of these goods etc.

The ministry said most of these inputs, or input services, have multiple uses. Under GST regime, it is difficult to prescribe a separate rate of tax for sugar, etc. when supplied for a particular purpose.

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 ministry 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 statement added.

GST has been rolled out in the country from 1 July.


Updated Date: Jul 11, 2017 18:58 PM

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