The Centre has decided to refund its share of GST charged on the purchase of raw food items by charitable religious institutions for distributing free meals to the public, Union Minister and SAD leader Harsimrat Kaur Badal said on Friday.
The Centre's share of GST charged on the raw food materials purchased by the religious institutions will be refunded under a new scheme 'Seva Bhoj Yojana', she told reporters at a press conference in the national capital.
The move came after the Shriomani Akali Dal, an ally of the ruling NDA, and the Shiromani Gurdwara Parbandhak Committee demanded that raw food material being purchased for langars served at gurdwaras be exempted from the Goods and Services Tax (GST).
Harsimrat, who is the Minister of Food Processing, had also written a letter in this regard to Prime Minister Narendra Modi and Finance Minister Arun Jaitley.
The scheme has a financial outlay of around Rs 325 crore from 2018-19 to 2019-20 and has been notified by the Union Ministry of Culture. The assistance will come under the 'Seva Bhoj Yojana'.
The central government's share of Integrated Goods and Services Tax (IGST) paid on the purchase of specific items by charitable religious institutions for distributing free food to the public shall be reimbursed as financial assistance by the Government of India, according to the order of the ministry.
Welcoming the decision, SAD president Sukhbir Badal, who was also present at the press meet in Delhi, said it shows the commitment of his party towards the entire Sikh community and towards all faiths in the country.
He also thanked Prime Minister Modi for taking this decision and at the same time demanded that state governments across the country waive their share of GST.
Taking to Twitter Harsimrat said, "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."
The Union Minister also uploaded a copy of the Centre's order on the scheme on her Twitter account.
"Sanction of the President is hereby accorded for the launching of the scheme of financial assistance under Seva Bhoj Yojna from the financial year 2018-19 to the financial year 2019-20 with financial outlay of Rs 325 crore.
"Under this scheme, the CGST and the centre's share of IGST paid on the purchase of specific items by charitable/religious institutions for distributing free food to the public shall be reimbursed as financial assistance by the Government of India," the order, dated May 31, stated.