December 20, 2023

By Vijay Kumar

A question was asked in the Lok Sabha recently

(a) whether GST is charged on Gangajal sold from post offices and if so, the details thereof;

(b) the details of the tax that has been collected till date on this; and

(c) the details of the notification on the basis of which this was done.

The Minister of State for Communications answered two weeks ago on 6th December 2023:

As on date GST is not being charged on sale/distribution of Gangajal through Post Offices. The Department of Posts follows the GST notifications on the subject as issued from time to time.

Please note, "as on date", GST is not being charged. Was it charged earlier?

On 12th October 2023, CBIC clarified in its official handle on social media platform X(Twitter).

Clarification regarding certain media reports on applicability of GST on Gangajal.

Gangajal is used in pooja by households across the country and puja samagri is exempt under GST. 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 these items have been exempt since the introduction of GST.

But is Gangajal puja samagri and exempted from GST? The Board states that:

1. Gangajal is used in pooja.

2. Puja samagri is exempt under GST.

3. Therefore, all these items (puja samagri) have been exempt since the introduction of GST.

In the 14th GST Council Meeting held on 18 and 19 May 2017,

The Minister from Uttar Pradesh suggested that 'Puja samagri' including 'Hawan samagri' should be kept under the exempt category. The Secretary suggested that the Fitment Committee should first define the term 'puja samagri' and then it might be exempted. The Council agreed to this suggestion and it was decided that Fitment Committee should first define the term 'puja samagri' and then exempt it.

In the next meeting - the 15th GST Council Meeting held on 3 June 2017,

The Secretary recalled that in the last Council meeting, it was decided to define Puja samagri and then to exempt it. After further discussion, the Council agreed to keep the puja samagri, namely (i) Rudraksha, rudraksha mala, tulsi kanthi mala, panchgavya (mixture of cowdung, desi ghee, milk and curd); (ii) Sacred thread (commonly known as yagnopavit); (iii) Wooden khadau; (iv) Panchamrit; (v) Vibhuti sold by religious institutions, (vi) Unbranded honey (already under Nil rate); and (vii) Wick for diya (viii) Roli, (ix) Kalava Raksha sutra), (x) Chandan tika at Nil rate.

Please note there is no mention of Gangajal in the list of puja samagri.

Accordingly, Sl. No. 148 of the table in NOTIFICATION NO. 2/2017-Central Tax (Rate); Dated: June 28, 2017, exempts the following goods falling under any chapter from CGST.

Puja samagri namely,-

(i) Rudraksha, rudraksha mala, tulsi kanthi mala, panchgavya (mixture of cowdung, desi ghee, milk and curd);

(ii) Sacred thread (commonly known as yagnopavit);

(iii) Wooden khadau;

(iv) Panchamrit,

(v) Vibhuti

(vi) Unbranded honey

(vii) Wick for diya.

(viii) Roli

(ix) Kalava (Raksha sutra)

(x) Chandan tika

Again, Gangajal does not find a place in the notification. Not all puja samagri are exempted; only those that are named in the notification are exempted. But CBIC states through Twitter that "Gangajal is used in puja by households across the country and puja samagri is exempt. But is Gangajal exempted? It is true that Gangajal is used in puja and puja samagri are exempted, but the moot question whether puja samagri includes Gangajal is not answered.

The Postal Department portal states, there is no GST on Gangajal.
https://www.epostoffice.gov.in/ProductDetails/ProductDetails?Prodid=3826&SubCatId=35%20&brandId=10%20&page=0%20&ProdListLctn=SearchProduct

But a post from India Post on August 18, 2023, states that there is a GST of 18%.

https://x.com/IndiaPostOffice/status/1692425833586233541?s=20

There is politics added to the confusion. The Congress Party claimed that it was due to its pressure that the BJP-led Central government "reversed the decision of levying 18 per cent GST on Gangajal".

India Post once said that there is GST of 18% on Gangajal and now says there is no GST. The CBIC through Twitter (now X) says that Gangajal is used in puja and puja samagri is exempted but does not state emphatically whether Gangajal is included in puja samagri. The exemption notification listing puja samagri does not include Gangajal.

Suppose an IRS probationer in a class in NACIN [National Academy of Customs, Indirect Taxes & Narcotics] asks a question, "what is the applicable rate of GST on Gangajal?" As they don't like to answer questions in academies, the general practice is to make the probationers find out the answer. So, a batch of five probationers will be made into a team to do research and come up with an answer within the next week.

After an extensive research for a week, the team comes up with the following conclusion.

1. Gangajal as such does not figure anywhere in the HSN or any notification issued under GST.

2. However, water finds a place and attracts GST.

3. Pooja samagri is exempted under NOTIFICATION NO. 2/2017-Central Tax (Rate); Dated: June 28, 2017.

4. Pooja samagri as per the notification contains a list of 10 items, in which Gangajal does not figure.

5. Therefore, Gangajal is not generally or specifically exempted and will attract GST.

6. However, the CBIC, in a tweet has clarified that Gangajal is used in pooja and pooja samagri is exempted.

7. The validity of this clarification through a social media post is doubtful. First of all, Gangajal is not specifically mentioned in the items covered by pooja samagri like vibhuti and yagnopavith are covered. Further the validity and binding nature of a clarification given by the Board in a social media post is very much doubtful.

8. Though the Postal Department has clarified that there is no GST on Gangajal, that clarification would have as much weight as a clarification given by the CBIC on postal charges.

9. The interesting Side Story in this discussion would be that in practice, no GST would be levied on Gangajal. No officer of the department would have the guts to demand GST on Gangajal from any supplier against the opinion of the Board expressed through social media tweet. So, there will be no GST practically on Gangajal.

10. However, it is the opinion of this group that GST is leviable on Gangajal and if the government wants to exempt Gangajal from GST, the proper procedure would be to include Gangajal also in the list of items of the Pooja Samagri in the notification, in the absence of which any strong clarification from the Board will not help in exempting Gangajal.

11. As per Section 168 of the CGST Act,

The Board may, if it considers it necessary or expedient so to do for the purpose of uniformity in the implementation of this Act, issue such orders, instructions or directions to the central tax officers as it may deem fit, and thereupon all such officers and all other persons employed in the implementation of this Act shall observe and follow such orders, instructions or directions.

But it does not include unsigned clarifications issued by the Board through social media.

12. Therefore, Gangajal is not exempted.

Then, the Course Director will decide that the issue is debatable and is better left to the probationers to decide when they get the opportunity and need in the future when they would be working as adjudicators.

Will it be sacrilege to collect tax on Gangajal and will Maa Ganga take offence to the tax?

While arguing a case for the Tirupati Municipality against the Balaji temple in a High Court, the Counsel for the Municipality told the judge that judges usually tend to give judgements in favour of God/temple. The judge replied, "He (GOD) will not tolerate that. He put me here to give the correct judgement, not a biased one - not even in His favour."

If Maa Ganga does not get angry when you pay money to buy Gangajal, she may not mind if you pay a little tax.

In any case, Board appears to be saying that Gangajal is exempted and the postal department promises to deliver Gangajal without GST.

As of now, the holy Gangajal will not suffer GST.

Until next week