The government authorities have clarified that the mess facility which is provided to staff or students will continue to be taxable at 5 percent without any input tax credit. The hostel mess of educational institutions and contractors will continue to attract 5 percent GST without any benefit of input tax credit as stated by the finance ministry.
The Central Board of Excise and Customs (CBEC) has recently clarified the tax rate and further provisions regarding the hostel mess as the queries were surging over this particular topic. In a statement, it is noted that “Supply of food or drink provided by a mess or canteen is taxable at 5 percent without Input Tax Credit… It is immaterial whether the service is provided by the educational institution itself or the institution outsources the activity to an outside contractor.”
Earlier many of the students living out of the studies or job purpose has complained of higher eating expenses on daily basis due to the implementation of GST on the restaurants. While many of the student community prefer to eat outside on a regular basis, it was proving a non-economical affair to continue such eating habits. Recently the government has taken down the GST rates from the restaurants and hotels in the view of the basic need of public and tourists.
The goods and service tax is set to take the economic instability as it will oblige almost all the commodities and supplies under its ambit with a scrutinized system for tracking the transactions. The slab rates are 5, 12, 18 and 28 percent which are applicable to a range of products and services along with the cess on luxury items as specified by the government.
Please clarify me education institute canteen given on lease basis then what is the GST rate on lease 5% or 18%
We have just completed one month mess just want no how much GST will be applicable and it not more than 25-30 L year.
Supply of food or drink provided by a mess or canteen is taxable at 5% without Input Tax Credit [Serial No. 7(i) of notification No. 11/2017-CT (Rate) as amended vide notification No. 46/2017-CT (Rate) dated 14.11.2017 refers]. It is immaterial whether the service is provided by the educational institution itself or the institution outsources the activity to an outside contractor.
I am staying at a senior citizens retirement home in Bangalore.There is a mess facility for food to the residents. The owner company has outsourced food service to an external contractor. The owner company provides space for canteen, all kitchen equipment and utensils. The contractor spends on materials and labour.
At the end of each month, the contractor invoices the owner company for food services provided to residents as per terms of Agreement between the owner company and the contractor.The owner company collects a pre-agreed amount from residents for room rent, food and other services like security, medical services at a pre-agreed amount. The owner company is charging 18 percent GST on food services from us residents saying this arrangement falls under outdoor catering by the contractor and hence 18 percent GST is applicable. Even posh air-conditioned restaurants charge only 5 percent GST. Should it not be 5 percent in our case also. Please advise.Thanks.
As service provider has come to your place for providing services and also the whole facility is provided by the service recipient to the service provider, so it will be treated as outdoor catering service and will attract GST @ 18%. It will not be treated as restaurant service, as service provider comes to your place for supply.