RATE OF GST FOR FOOD AND BEVERAGE SERVICES BY EDUCATIONAL INSTITUTIONS
The Goods and Services Tax
Act, 2017 came into force in India with effect from 1.7.2017.
The Central Government has clarified that
supply of food and beverages by an educational institution to its students,
faculty and staff, where such supply is made by the educational institution
itself, is exempt under Notification No. 12/2017-Central Tax (Rate) dated
28.06.2017, vide Sl. No. 66 w.e.f. 01-07-2017 itself.
Supply of food and beverages by any person
other than the educational institutions based on a contractual arrangement with
such institution is leviable to GST@ 5%.
The relevant Circular No.85/2018-GST dated
1.1.2019 is given below for ready reference.
F.
No. 354/428/2018-TRU
Government of India
Ministry of
Finance
Department of Revenue
Tax research Unit
****
Room No. 156, North Block, New
Delhi, the 1st January, 2019
To
The Principal Chief Commissioners/
Chief Commissioners/
Principal
Commissioners/ Commissioner
of Central Tax (All)
/ The Principal Director Generals/ Director
Generals
(All)
Madam/Sir,
Subject: Clarification on GST rate applicable on supply of food and beverage services by educational institution- reg.
Representations have been received seeking
clarification as to the rate of GST applicable on supply of food and beverages services by educational institution to its students.
It
has been stated that the words “school, college” appearing in Explanation 1 to Entry 7 (i) of Notification No. 11/2017-Central Tax (Rate) dated
28.06.2017 give rise to doubt whether
supply of food and drinks
by an educational institution to its students is eligible for exemption under Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017
Sl. No 66, which exempts services provided
by
an educational
institution
to its students, faculty and staff.
2. The
matter has been examined. Notification No. 11/2017-Central Tax (Rate) dated
28.06.2017, Sl. No. 7(i) prescribes GST rate of 5% on supply of food and beverages services. Explanation 1 to the said entry
states that such supply can take place at canteen, mess, cafeteria of an institution such as school, college, hospitals etc. On the
other hand, Notification No. 12/2017-Central
Tax
(Rate), Sl. No. 66 (a)
exempts
services provided by an educational institution
to its students, faculty and staff. There is no conflict between the
two entries. Entries in Notification No. 11/2017-Central Tax (Rate) prescribing GST rates on service have to be
read together
with entries in exemption Notification No.
12/2017-Central Tax
(Rate) dated 28.06.2017.
A supply which is
specifically covered by any entry of Notification No. 12/2017-Central Tax (Rate) dated
28-06-2017 is
exempt from GST notwithstanding
the fact that GST rate has been prescribed for the same under Notification
No. 11/2017-Central Tax (Rate) dated
28.06.2017.
2.1 Supply of all services by an educational institution
to its students,
faculty and staff is
exempt under Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, Sl. No. 66.
Such services include supply of food and beverages by an educational institution to its
students, faculty and staff. As stated in explanation 3 (ii) to Notification No. 12/2017-Central Tax (Rate)
dated 28.06.2017 Chapter, Section, Heading, Group or Service Codes mentioned
in column (2) of the
table in Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017
are
only indicative. A supply is eligible for exemption under an
entry of the said notification
where the description
given in column (3) of the table leaves no room for any
doubt. Accordingly, it is clarified that supply of food and beverages by an educational institution to its
students,
faculty and staff, where such
supply is made by the educational
institution
itself, is exempt under Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, vide Sl. No.
66 w.e.f. 01-07-2017 itself. However, such supply of food and beverages by any person other than the educational institutions based on a contractual arrangement with such institution is
leviable to GST@ 5%.
3. In order to remove any doubts on the issue, Explanation 1 to Entry 7(i) of Notification
No. 11/2017-Central Tax (Rate) dated 28.06.2017 has been amended vide Notification No.
27/2018-Central Tax (Rate) dated 31.12.2018 to omit from it the words
“school, college”. Further, heading 9963 has been added in Column (2) against entry at Sl. No. 66 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017,
vide Notification No. 28/2018-Central Tax (Rate) dated
31.12.2018.
4. Difficulty, if any, in implementation of this Circular may be brought to the notice of
the Board.
Yours Faithfully,
(Harish Y N) Technical Officer, TRU
Email: harish.yn@gov.in
Tel: 011 2309 5547