5% GST on Mess facility provided by Educational Institutions – Is it correct?

Dear Readers,

Government of India vide Circular No. 28/02/2018 dated 08.01.2018 has issued clarification on following queries in situation when the educational institutions have mess facility for providing food to their students and staff. Such facility is either run by institution/students themselves or is outsourced to a third person.

⇒Whether mess facility provided by Educational Institutions is taxable in GST

⇒ If taxable, then what is the rate of GST applicable on mess facility provided by such educational Institutions
Clarification issued vide Circular 28/02/2018 and corrigendum to Circular 28/02/2018:

 It has been clarified that if the catering services is one of the services provided by an educational institution to its students, faculty and staff and the said educational institution is covered by the definition given under para 2(y) of notification No. 12/2017-Central Tax (Rate), then the same is exempt. [Sl. No. 66(a) of notification No. 12/2017-Central Tax (Rate) refers]

If the catering services, i.e., supply of food or drink in a mess or canteen, is provided by anyone other than the educational institution, then it is a supply of service at entry 7(i) of notification No. 11/2017-CT (Rate) [as amended vide notification No. 46/2017-CT (Rate) dated 14.11.2017] to the concerned educational institution and attracts GST of 5% provided that credit of input tax charged on goods and services used in supplying the service has not been taken, effective from 15.11.2017.

 Conclusion: Canteen or mess service provided by an educational institution to its students, faculty or staff is exempt else same is taxable @ 5% provided credit of input tax has not been taken.

These are author's personal views and shall not be considered as professional advice.

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