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Date – 18th Jun 2021

Central Board of Indirect Taxes and Customs (CBIC) has said that supplying food to colleges under mid-day meal scheme, pre-schools and anganwadis is exempt from GST. CBIC has issued a group of clarification on certain decisions taken by the GST Council in its 43rd meeting on May 28, 2021. The CBIC said it had received representations regarding applicability of GST on the problems on 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. 

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

Under the products and services tax (GST), any catering service, including mid-day meals, provided to an academic institution is exempt from the levy.
CBIC further said, "it is clarified that services provided to an academic institution by way of serving of food ( catering including mid-day meals) are exempt from levy of GST regardless of its funding from government grants or corporate donations”.

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

The EY Tax Partner Abhishek Jain said the clarification by the govt that the GST exemption on catering services provided to educational institutions will have a good ambit is going to be much appreciated by the stakeholders.
Mr Jain said, "This clarification will help reduce the value on account of GST, for the tutorial institutions involved in providing such meals thereby saving on the corpus of such institutes," 

CBIC said that during a separate clarification on levy of GST on supply of varied services by the Central and State Board (such as National Board of Examination),  GST is exempt on services provided by central or state boards (including the boards like NBE) by way of conduct of examination for the scholars. It includes the conduct of an entrance exam for admission to the tutorial institution. "Therefore, GST shall not apply to any fee or any amount charged by such boards for the conduct of such examinations including entrance examinations."  
However, CBIC clarified that an 18 percent GST would be levied to other services provided by such Boards, like providing accreditation to an establishment or to knowledgeable.