Due to the two conflicting notifications, doubt was raised with regard to the GST on Supply of Food & Beverage service by the Educational Institution to its students and the same is clarified in the current circular.
The outcome of entire clarification is tabulated here under for easy understanding
|Foods and beverages supplied by an educational institution to its students, faculty and staff||Exempt under GST vide sr. no. 66 of notification no. 12/2017- Central Tax (Rate) dated 28th June, 2017|
|Food and beverages supplied by any person other than educational institution based on a contractual agreement with such institution.||GST payable @5%|
|Foods and beverages supplied by an institution (other than educational institution) to its students, faculty and staff||GST payable @5%|
1. Taxability as per notification no. 11/2017 – central tax (rate) dated 28th June, 2017
- Explanation 1 provided under sr. no. 7 of notification no. 11/2017 covers supply at a canteen, mess, cafeteria or dining space of an institution such as a school, college, by such institution or by any other person based on a contractual arrangement with such institution for such supply.
- Thus as per sr. no. 7 foods and beverages served by an institution is chargeable to GST @5% (2.5% CGST and 2.5% SGST).
2. Exemption available at notification no. 12/2017 – central tax (rate) dated 28th June, 2017
- Sr. No. 66 of notification no. 12/2017 provides exemption from GST to an educational institution.
- As per the said serial number, all the services provided by an educational institution to its students, faculty and staff is exempt from GST.
- Above exemption obviously includes the foods and beverages being served by an education institution.
- Clarification by the board on above conflicting situation and subsequent steps thereon
- The Central Board of Indirect Tax and Customs, vide circular no. 85/04/2019-GST dated 1st January, 2019, has clarified that notification no. 11/2017-Central Tax (Rate) prescribes the GST rates on services and the same have to be read together with entries in exemption notification no. 12/2017-Central Tax (Rate) dated 28th June, 2017.
- It has further been clarified by the board, that the supply which is specifically covered by any entry of notification no. 12/2017-Central Tax (Rate) dated 28th June, 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 28th June, 2017