Centre Waives Off GST On Items Purchased For Langar

In a big relief to Gurudwaras, The central government has revoked GST on raw materials for langar items as a “financial assistance” which will be provided under the ‘Seva Bhoj Yojna’ scheme; the central government has an outlay of Rs 325 crore.

The Government Order

GST is not levied on the food served in langar but on the raw materials purchased for preparing the food. According to the order released by the Ministry of Culture on May 31, 2018, CGST and IGST paid on the purchase of items by charitable, religious institutions for distributing free food to the public would be reimbursed by the Central government. The order came into effect after President Ram Nath Kovind gave his nod for the scheme which has been launched for two years (2018-19 and 2019-20).

“Heartfelt gratitude to PM Narendra Modi Ji for respecting Sikh sentiments by launching Seva Bhoj Yojna to refund CGST and IGST on Langar served in Gurudwaras and all other religious/charitable institutions,”

Union Cabinet Minister of Food Processing Harsimrat Kaur Badal twitted early on Friday.

Heartfelt gratitude to PM Sh. @narendramodi ji for respecting Sikh sentiments by launching Seva Bhoj Yojna to refund CGST and IGST on Langar served in Gurudwaras and all other religious/charitable institutions. pic.twitter.com/7X2adoKZvi

— Harsimrat Kaur Badal (@HarsimratBadal_) June 1, 2018

Demand for the waiver

The Cabinet Minister, in April 2018, had written to Finance Minister Arun Jaitley requesting him to waive GST on langar items. “The preparation of langar is not a business activity. So, no tax should be levied on it. In fact, it’s a noble cause and a religious and public welfare activity,” she told the Financial Express.

Bihar Chief Minister Nitish Kumar had also supported Kaur’s demand and wrote a letter to the Finance Minister. “Even though langar is not taxable under GST, some significant inputs like sugar, ghee, edible oil, spices etc., are taxable. The tax on these inputs adds to the cost of Gurudwaras. Imposition of tax on the inputs as mentioned above should be discouraged given the sanctity of langar,” he said.

The Shiromani Gurudwara Parbandhak Committee (SGPC), which manages all gurdwaras, had been urging the Centre to exempt the free kitchens at the Golden Temple and other Sikh shrines from the purview of the Goods and Services Tax.

Punjab government waives SGST

The Amarinder Singh led Congress government in Punjab, in March 2018, waived half of the SGST levied on food items coming into the Golden Temple, Amritsar, for langar (community kitchen). The waiver was an announcement after Dera Baba Nanak’s Congress MLA Sukhjinder Singh Randhawa raised the issue during the debate on the governor’s address. Also, Finance Minister Manpreet Singh Badal proposed a resolution for the waiver for Golden Temple. “In 2002, when I took over in my previous term as CM, sales tax was waived, and now we will not charge GST on langar items at Golden Temple,” said the CM

GST paid on langar items

According to a report, the Golden Temple paid Rs 2 crore as GST in seven months. The SGPC spokesperson Diljit Singh Bedi said that from July 1, 2017, to January 31, 2018, the SGPC had paid Rs 2 crore as GST on the purchase of different items required for preparing the langar at the Golden Temple. “The SGPC has paid Rs 2 crore as GST while purchasing ration for langar and Prasad, ever since the new tax regime came into force last year. From July 1, 2017, to January 31, 2018, we have paid Rs 2 crore as GST on the purchase of different items required in the langar at the Golden Temple,” he had said in February this year.

Langar: A selfless service

The SGPC manages gurdwaras, or Sikh shrines, across Punjab, Haryana and Himachal Pradesh. It had claimed that the GST was putting an extra burden on its finances in running the free food service. The officials of SGPC say that gurdwaras across the country could be serving free food to nearly 10 million people on a daily basis.

The Golden Temple complex provides free food to more than 100,000 people on weekends and other rush days. Usually, it serves freshly cooked food to 50,000 on weekdays. The community kitchen, which serves a vegetarian meal at the complex is one of the largest such in the world.

Also published on Medium.