Services provided to educational institutions in the form of catering, including mid-day meals, are not exempted from the levy of GST as it is supply of goods.

The Karnataka Authority for Advance Ruling ( KAAR ) has clarified that supplementary goods provided to the aganwadi centres are not exempted from the GST ( Goods and Services Tax ) as per Circular no. 149/05/2021 and Notification 12/2017 -( Central Tax) Rate . The Applicant, Raibag Taluka MSPC is registered as a “Society” under the Karnataka Societies Registration Act, 1960. Their operations involve supplying supplementary products to Anganwadi centers through the Child Development Project Office (CDPO), with activities supervised by the CDPO of the respective Taluks. It is registered under the provisions of the Central Goods and Services Tax Act, 2017, and the Karnataka Goods and Services Tax Act, 2017 CGST and KGST/SGST Act. The AAR bench observed that the entry 66 indicates that all catering services provided to educational institutions are exempted from GST, including the provision of mid-day meals. The entry’s broad scope encompasses the serving of food in schools and pre-schools. Notably, Anganwadis also provide pre-school non-formal education, thereby qualifying as educational institutions under this definition. Further noted that the entry 66 clause (b)(i) of notification No. 12/2017-Central Tax (Rate) dated 28th June, 2017, exempts Services provided to an educational institution, by way of catering, including any mid-day meals scheme sponsored by the Central Government, State Government or Union territory. This entry applies to pre-school and schools. As per the recommendations of the GST Council, it was clarified that the services provided to educational institutions through food catering, including mid-day meals, are exempted from GST. This exemption applies regardless of whether the funding derives from government grants or corporate donations, as stipulated in Entry 66(b)(i). The definition of educational institutions within the notification includes Anganwadis, confirming that the serving of food at these centers is also exempt, whether funded by the government or corporate donations. However, considering the facts of the present case, notification and the cirular noted that, the two-member bench of the advance ruling authority, comprising Dr. M.P. Ravi Prasad and Kiran Reddy, ruled that the circular 149/05/2021-GST provides GST exemption only to the supply of services provided to the educational institutions including anganwadis but not to the supply of goods. The applicant does not provide services, thus, the circular is not applicable to them. Thus, the applicant is not exempted from the GST. The AAR bench observed that “the applicant is purchasing and supplying only goods and not into Supply of any service. Since Notification No. 12/2017 Central Tax (Rate), dated:28.06.2017 deals with supply of services which are exempted, the same cannot lied to supply of goods as in the case of the applicant. Since the Notification No. 12/2017 Central Tax (Rate), dated 28.06.2017 is not applicable to the applicant’s case, Circular No. 149/05/2021-GST, dated: 17.06.2021 also is not applicable to the applicant’s case. Clarification No. KSA/GST.CR-05/2019- 20 Dated:23.06.2021 is same as Circular No. 149/05/2021-GST, dated: 17.06.2021 but issued by the State of Karnataka and hence the same is not applicable to the applicant’s case.”