Government provides Clarification regarding GST on supply of food and drinks in educational institutions

CBEC has clarified the GST rate applicable on supply of food and drinks in educational institutions vide press release dated 11th April 2018. Click here to download the official press release. Clarification Number 1 Supply of food and drinks in a mess or canteen in an educational institution will attract GST @ 5% without INPUT Tax Credit (ITC). Authors Comment: Basically Indoor catering services are taxed @ rate of 5% ifINPUT Tax Credit is not taken by the service provider. The Rate of Indoor catering services is 18% with benefit of availing full ITC if:

• The Indoor Caterer has license to serve Alcohol, or
• The premises/or any part of premises of Indoor Caterer have Air conditioner or central air-Heating Facility at any time during the year.

In another case the rate of GST forIndoor catering services is 12%with benefit of availing full ITC. CBEC has clarified the GST rate applicable on supply of food and drinks in educational institutions. Clarification Number 2 If schools up to higher secondary level supply food directly to students, then the same is exempt from GST. Authors Comment: Services provided by an educational institution to its students, faculty and staff are exempted from GST by serial number 66 of the exemption notification number 12/2017- Central Tax (Rate) dated 28th June 2017 & therefore fooding services provided byschools to it's students are exempt from GST.

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