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.
