Supply of food to pre-schools, anganwadis, mid-day meals exempt from GST

Supplying food to schools under mid-day meal scheme, pre-schools and anganwadis is exempt from GST, the Central Board of Indirect Taxes and Customs (CBIC) has said.

Issuing a set of clarification on certain decisions taken by the GST Council in its 43rd meeting on May 28, the CBIC said it had received representations regarding applicability of GST on the issues as to whether serving of food in schools under mid-day meals scheme would be exempt if such supplies are funded by government grants and/or corporate donations. Under the goods and services tax (GST), any catering service, including mid-day meals, provided to an educational institution is exempt from the levy.

The CBIC said this would cover serving of any food to a school, including pre-school. Further, an anganwadi inter alia provides pre-school non-formal education and hence, anganwadi is covered by the definition of educational institution (as pre-school).

"...it is clarified that services provided to an educational institution by way of serving of food ( catering including mid- day meals) is exempt from levy of GST irrespective of its funding from government grants or corporate donations."

"Educational institutions as defined in the (GST) notification include anganwadi. Hence, serving of food to anganwadi shall also be covered by said exemption, whether sponsored by government or through donation from corporates," the CBIC said on June 17.

EY Tax Partner Abhishek Jain said the clarification by the government that the GST exemption on catering services provided to educational institutions will have a wide ambit will be much appreciated by the stakeholders. "This clarification will help reduce the cost on account of GST, for the educational institutions involved in providing such meals thereby saving on the corpus of such institutes," Jain added.

In a separate clarification on levy of GST on supply of various services by the Central and State Board (such as National Board of Examination), the CBIC said GST is exempt on services provided by central or state boards (including the boards such as NBE) by way of conduct of examination for the students. It includes conduct of entrance examination for admission to educational institution.

"Therefore, GST shall not apply to any fee or any amount charged by such boards for conduct of such examinations including entrance examinations," it said.

Besides, GST is also exempt on input services related to admission to, or conduct of examination, such as online testing service, result publication, printing of notification for examination, admit card and questions papers etc, when provided to such Boards.

However, a 18 per cent GST would be levied to other services provided by such Boards, like providing accreditation to an institution or to a professional, the CBIC clarified.