Clarification on GST rate applicable on supply of food and beverage services by educational institution. - GST - States - 10/2019/GST

Government of Andhra Pradesh Commercial Taxes Department Proceedings of the Chief Commissioner of State Tax (FAC), Andhra Pradesh Present: Sri.J.Syamala Rao, I.A.S. ------------------------------------------------------------------------------------------------------ Office of the Chief Commissioner of State Tax, Edupugallu, Vijayawada Circular No. 10/2019/GST CCTs Ref.in CCW/GST/74/2015 Dt. 31.01.2019 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 I to Entry 7 (i) of G.O.Ms.No.259, Revenue (Commercial Taxes-II), 29th June, 2017 {corresponding Notification No. 1 1/2017-Central Tax (Rate) dated give rise to doubt whether supply of food and drinks by an educational institution to its students is eligible for exemption under G.O.Ms.No.588, Revenue (Commercial Taxes-II), 12th December, 2017 {corresponding 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. G.O.Ms.No.259, Revenue (Commercial Taxes-II), 29th June, 2017 {corresponding 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 I 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, G.O.Ms.No.588, Revenue (Commercial Taxes-II), 12th December, 2017 {corresponding Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017}, 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 G.O.Ms.No.259, Revenue (Commercial Taxes- II), 29th June, 2017 {corresponding Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017} prescribing GST rates on service have to be read together with entries in exemption in G.O.Ms.No.588, Revenue (Commercial Taxes-II), 12th December, 2017{corresponding Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017}. A supply which is specifically covered by any entry of G.O.Ms.No.588, Revenue (Commercial Taxes-II), 12th December, 2017{corresponding 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 G.O.Ms.No.259, Revenue (Commercial Taxes-II), 29th June, 2017 {corresponding 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 G.O.Ms.No.588, Revenue (Commercial Taxes-II), 12th December, 2017 {corresponding Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017}, SI. 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 G.O.Ms.No.588, Revenue (Commercial Taxes-II), 12th December, 2017 {corresponding 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 G.O.Ms.No.588, Revenue (Commercial Taxes-II), 12th December, 2017 {corresponding Notification No. 12/2017- Central Tax (Rate) dated 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 G.O.Ms.No.588, Revenue (Commercial Taxes-II), 12th December, 2017 {corresponding 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 I to Entry 7(i) of G.O.Ms.No.259, Revenue (Commercial Taxes-II), 29th June, 2017 {corresponding Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017} has been amended vide G.O.Ms.No.24 Rev.(CT-II) Dept. m. 18-01-2019 {corresponding 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 SI. No. 66 of G.O.Ms.No.588, Revenue (Commercial Taxes-II), 12th December, 2017 {corresponding Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017, vide G.O.Ms.No.25 Rev.(CT-II) Dept. Dt. 18-01-2019 {corresponding notification No. 28/2018-CentraI Tax (Rate) dated 31.12.2018}. Chief Commissioner