In a notification issued on 11th July 2017, the Ministry said 'prasadam' supplied by religious places like temples, mosques, churches and gurudwaras will not be subject to any Central, State or Integrated GST, as the case may be.
The free food supplied by religious institutions does not attract any Goods and Services Tax but the inputs required to make it, including sugar, vegetable oil and ghee are subject to GST.
No GST is applicable on such food supplied in 'anna kshetras' run by religious institutions.
However, some of the inputs and input services required for making 'prasadam' would be subject to GST,which include sugar, vegetable edible oils, ghee, butter and service for transportation of these goods.
Why inputs and input services required for making 'prasadam' would be 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 inputs 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.
It is not desirable to provide end use based exemption for inputs or input services for making prasadam or food for free distribution by religious institutions.
Following inputs items used for making parasadam are exempted:
- Rudraksha, rudraksha mala, tulsi kanthi mala, panchgavya (mixture of cowdung, desi ghee, milk and curd)
- Sacred thread (commonly known as yagnopavit)
- Wooden khadau
- Vibhuti sold by religious institutions
- Unbranded honey
- Wick for diya
- Kalava (Raksha sutra)
- Chandan tika
Following items will be taxed at the rate of 5%:
So, the prasadam supplied by religious places will not be subject to GST. However, some of the inputs required to make it are subject to GST as these inputs comes under the 5 to 18 percent GST bracket.