Supply of all services by an educational institution to its students, faculty and staff is exempt under GST

Ministry of Finance (Department of Revenue) vide Circular No.85/04/2019-GST, dated 01.01.2019 has clarified and reiterated that 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.

The circular

http://www.cbic.gov.in/resources//htdocs-cbec/gst/circular-cgst-85.pdf

Educational Institution should be the supplier

Central Board of Indirect Taxes & Customs has now 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, 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%.

In other words, GST would not apply only if “supply of services” is by the educational institution on its own. If the educational institution hires a contractor to supply food and beverages at say the school or college or university’s canteen, GST @5% would apply.