No GST on Food serving in Anganwadis under Mid-Day Meals Scheme funded by Govt Grants / Corporate Donations: CBIC [Read Circular]

The Central Board of Indirect Taxes and Customs ( CBIC ) has clarified that no GST is applicable on the serving of food in schools, pre-schools including Anganwadis under Mid-Day Meals Scheme would be exempt if such supplies are funded by government grants and/or corporate donations.

This is in the light of receiving various representations from the stakeholders where the question on the taxability of such activities invoked amidst contradictory views taken by different AAR Rulings. The issue was examined by GST Council in its 43rd meeting held on 28th May, 2021.

The circular issued by the Board on Thursday pointed out that Entry 66 clause (b)(ii) 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,” it added.

Accordingly, as per said entry 66, any catering service provided to an educational institution is exempt from GST. The entry further mentions that such exempt service includes mid-day meal service as specified in the entry. The scope of this entry is thus wide enough to cover any serving of any food to a school, including pre-school. Further, an Anganwadi interalia provides pre-school nonformal education. Hence, Anganwadi is covered by the definition of the educational institution (as pre-school). “Accordingly, as per the recommendation of the GST Council, it is clarified that services provided to an educational institution by way of serving of food ( catering including mid-day meals) are exempt from levy of GST irrespective of its funding from government grants or corporate donations [under said entry 66 (b)(ii)]. Educational institutions as defined in the notification include Anganwadi. Hence, serving of food to Anganwadi shall also be covered by the said exemption, whether sponsored by the government or through a donation from corporates,” the Board clarified.