Educational institutions obtain many services one of which is catering service. Many times catering services providers get confused regarding their taxability for service provided to educational institutions. The same question has recently been clarified by the Authority for Advance Ruling in Karnataka in Advance Ruling No. KAR ADRG 04/2023, dated – 23.01.2023.
In the given case, applicant has sought advance ruling in respect of whether catering services provided to educational institutions from 1st standard to 2nd Pre University College is taxable or not according to Notification No. 12/2017 – Central Tax Rate – Heading 9992.
As per Notification 12/2017 – Central Tax (Rate),Extract of List of Exempted Services,
| Sl. No. | Chapter, Section, Heading, Group or Service Code (Tariff) | Description of Services | Rate (percent) | Conditions |
| 66 | Heading 9992 or Heading 9963 | Services provided— by an educational institution to its students, faculty and staff; aa) by an educational institution by way of conduct of entrance examination against consideration in the form of entrance fee; to an educational institution, by way of, -transportation of students, faculty and staff;catering, including any mid-day meals scheme sponsored by the Central Government, State Government or Union territory; security or cleaning or house-keeping services performed in such educational institution; services relating to admission to, or conduct of examination by, such institution; supply of online educational journals or periodicals: Provided that nothing contained in [sub-items (i), (ii) and (iii) of item (b)] shall apply to an educational institution other than an institution providing services by way of pre-school education and education up to higher secondary school or equivalent: Provided further that nothing contained in sub-item (v) of item (b) shall apply to an institution providing services by way of, — (i) pre-school education and education up to higher secondary school or equivalent; or (ii) education as a part of an approved vocational education course. | Nil | Nil |
Further, the “educational institution” is defined in clause (y) of para 2 of the Notification No.12/2017 – Central Tax (Rate) dated 28.06.2017 as under:
Educational Institution means an institution providing services by way of:
- Pre-school education and education up to higher secondary school or equivalent;
- Education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force;
- Education as a part of an approved vocational education course.
Since from the above extract of notification, it has been clarified that any catering service provided to educational institution providing service by way of pre-school education and education upto higher secondary school or equivalent is exempted from GST.
However, the question still remains for Pre-University College. The same has been clarified with the help of definition of educational institutions as the Pre-University College is also covered in the definition of educational institution, thus the notification applies on the same. Hence, GST is exempted.
