The Centre has decided to refund its share of GST charged on raw materials being procured for preparing food at langars (free meals) by religious institutions.
Announcing the government's decision, union minister for food processing Harsimrat Kaur Badal said that the Centre will refund the tax under a new scheme 'Seva Bhoj Yojana', PTI reported.
NDA ally Shiromani Akali Dal and the Shiromani Gurdwara Parbandhak Committee (SGPC) had been demanding withdrawal of the tax on purchases made for langar services.
Prior to the introduction of the GST, there was no VAT on the purchase of supplies for food prepared at langars.
Because of the GST, the SGPC, which runs langar services at the Golden Temple along with a number of other Sikh shrines, had expressed its concerns over the financial burden because of imposition of GST on supplies for langar.
Harsimrat Badal had written to the finance ministry last year urging it to exempt the langar sewa from the ambit of the GST.