Noting that end-use concessions and exemptions are difficult to administer under the goods and services tax (GST), the Finance Ministry on Tuesday said that free food supplied in anna kshetras run by religious institutions is exempt from the levy.

“Further, prasadam supplied by religious places like temples, mosques, churches, gurudwaras, dargahs, attracts nil Central GST and State GST or Integrated GST, as the case may be,” said an official statement.

However, the Finance Ministry ruled out giving tax exemption to inputs used for making prasadam such as sugar, vegetable edible oils, ghee, butter, service for transportation of these goods that attract GST.

“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 such inputs when supplied for a particular purpose,” it said.

End-use exemptions not possible

Since GST does not envisage end use based exemptions, the Ministry said that it would not be desirable to provide such exemption for ingredients and input services for making prasadam or food for free distribution by religious institutions.

The clarification comes after some groups including the Shiromani Gurudwara Prabandhak Committee had sought exemption from GST for inputs.

Food Processing Minister Harsimrat Badal had also written to the Finance Ministry for exemption from GST for purchases related to ‘langars’ and gurudwaras.

“At present, procurement of langar items like desi ghee, sugar and pulses by the SGPC runs into roughly ₹75 crore annually which will now be under the GST bracket of 5 to 18 per cent , thus increasing the financial burden by ₹ 10 crore for the gurudwaras,” the letter said.

Earlier, purchases for langar were exempt from value added tax.