There is conflict Between Notification No. 11/2017-Central Tax (Rate) Dated 28/06/2017 And Notification No. 12/2017- Central Tax (Rate) Dated 28/06/2017 on Applicabilty of GST on supply of food and beverage services by educational institution.
Notification 11/2017 Dated 28/06/2017 stated that the words “school, college” appearing in Explanation 1 to Entry 7 (i) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 (Explanation 1 Entry 7(i) added to Notification 11/2017 by Notification 13/2018-Central Tax (Rate) Dated 27/07/2018) give rise to doubt whether supply of food and drinks by an educational institution to its students is eligible for exemption under 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.
In this regard, Many 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.
CBIC Clarified that 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 1 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, Notification No. 12/2017-Central Tax (Rate), 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 Notification No. 11/2017-Central Tax (Rate) prescribing GST rates on service have to be read together with entries in exemption Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. A supply which is specifically covered by any entry of 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 Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017.
Further In Order to Remove the Conflict Between two notification, CBIC amend the notification 11/2017 Dated 28/06/2017 by Notification No. 27/2018-Central Tax (Rate) Dated 31/12/2018 to omitted the words “school,college” from Explanation 7(i).
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 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%.