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05 Jun 2018Posted By: Mudit Handa


Central Government excludes Langar services from the GST ambit

The advent of GST regime has impacted in making indirect taxation an all-encompassing realm. Since its inception, the new indirect tax regime has covered all every sphere of the economy that includes trading as well as not-for-profit activities.

The centre has recently acted as a benefactor for numerous charitable trusts in the country by taking a worthwhile decision to reimburse its share of GST tax on raw food items and grocery procured for preparation of food at langars by religious organisations. Langars are an age-old tradition in India, wherein all people regardless of their caste, class or creed serve and are served food in a common kitchen.

#1. How are Langar services treated under the GST?

Ever since GST regime has been initiated, there are many charitable services provided by religious communities that have been hitherto within the GST ambit. It has been decided that the Centre will refund the GST tax amount to the Langar committee under a new scheme called 'Seva Bhoj Yojana’.  

 

#2. Who has appealed for exemption of GST on Langar?

The decision has come in the wake of the plea made by the Punjab State Government and Shiromani Gurdwara Parbandhak Committee (SGPC) to the Centre regarding withdrawal of the GST tax on the purchase of raw goods for langar services.

 

#3. Why has this issue become a serious concern for religious bodies?

Before the period of transition to new tax scheme with GST registration, the Gurudwaras and other religious bodies were not charged VAT on the purchase of supplies for langar preparations. The new tax regime had mandated imposition of GST on such supplies. This had raised concerns for exemption of GST among the religious institutions.

If you seek any other sort of guidance regarding GST registration in India, feel free to contact us at 8881-069-069.

 

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