No GST For Food From Religious Institutions
July 13, 2017
The government on July 11th, 2017 clarified that all free food supplied by religious institutions is exempt from the Goods and Services Tax (GST).
The Finance Ministry cleared the confusion that GST applies to free food supplied in Anna kshetras run by religious institutions. That is false news propagated by the media and no GST is applicable on such food supplied free. Further, prasadam supplied by religious places like temples, mosques, churches, gurudwaras, dargahs, etc attracts nil CGST and SGST or IGST. 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. 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
SO, WHERE DOES GST APPLY?
However, the government added that some of the inputs and input services such as sugar, vegetable edible oils, ghee, butter, and the service for transportation of these goods required for making prasadam are subject to GST. 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.