GST is not applicable on free food supplied in religious institutions: Finance Ministry

No GST is applicable on free food supplied in anna kshetras run by religious institutions; prasadam supplied by religious places like temples, mosques, churches, gurudwaras, dargahs, etc. attracts Nil CGST and SGST or IGST, as the case may be.

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There are media reports suggesting that GST applies on free food supplied in anna kshetras run by religious institutions. This is completely untrue. 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, as the case may be.

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. 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.

Further, 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.

Under the GST regime, exports will be zero-rated in entirety unlike the present system where refund of some of the taxes does not take place due to fragmented nature of indirect taxes between the Centre and the States.

However, the GST will make India a common market with common tax rates and procedures and remove economic barriers.

The GST is largely technology driven and will reduce the human interface to a great extent. The GST is expected to improve the Ease of Doing Business in India.

In a majority of supplies of goods, the tax incidence approved by the GST Council is much lower than the present combined indirect tax rates levied [on account of central excise duty rates/embedded central excise duty rates/service tax post-clearance embedding, VAT rates or weighted average VAT rates, cascading of VAT over excise duty and tax incidence on account of CST, Octroi, Entry Tax] by the Centre and State(s).

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