CBIC Clarification on Taxability of Gangajal
In response to controversies based on some recent media report on taxability of Gangajal, the official handle of the Central Board of Indirect Taxes (CBIC) in its tweet in social media “X” (previously tweeter) has clarified on 12th October 2023 that no GST is payable on Gangajal. The Board stated that Gangajal is used in pooja by households across the country and puja samagri is exempt under GST.
Clarification by CBIC in social media “X”
“GST on puja samagri was discussed in detail in the 14th and 15th meetings of the GST Council held on 18/19 May, 2017 and 3rd Jun, 2017 respectively and decided to keep them in the exempt list. Therefore, all the items have been exempted since the introduction of GST.”
Background of the controversies on taxability of Gangajal:
In recent times, a controversy has surfaced regarding the taxation of ‘gangajal’ (holy water from the Ganges) under the Goods and Services Tax (GST) in India. This matter has sparked dissatisfaction among various political factions and seemingly caught the Finance Ministry off guard, as conflicting interpretations persist regarding its tax status. The Finance Ministry has claimed that ‘gangajal’ is listed as an exempted item, yet a closer examination reveals that it is not explicitly mentioned in the 10 commodities designated as ‘Pooja samagri’ (items used in religious rituals) by the Central Board of Indirect Taxes and Customs (CBIC).
Tax practitioners have cited this situation as another example of the challenges arising from the intricate classification structure of the GST system, echoing similar issues encountered with the treatment of related or analogous commodities. While some sellers categorize ‘gangajal’ as packaged water and levy an 18% GST, given its absence from the CBIC’s specified list, others consider it exempt and do not impose GST. Consequently, there exists a divergence in tax treatment, with certain taxpayers aligning their actions with their individual interpretations while filing returns.
This disparity in interpretation highlights the necessity for a clearer and more consistent classification framework within the GST structure to address such discrepancies and promote uniform tax application. Finding a resolution to such classification challenges is imperative to ensure a smoother and more equitable implementation of GST across diverse commodities and industries.
To access the tweet of CBIC in “X” CLICK HERE
To Read the Article “Functionality for enrolling unregistered persons for supply of goods through e-commerce operators” CLICK HERE
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CBDT Notification No 88/2023 Dated10 October 2023: Amendment in Rule 114B, 114BA & 114BB