There is no GST levied on the Canteen and the transportation services which are furnished by schools, said Maharashtra authority for advance ruling (AAR) in a ruling which provides relief to various schools all over India.
The question beneath the review was if these services given by the schools and the charges by them must be levied with GST. Under the GST platform, there shall be no tax on the school fees.
“Nil rate of tax on the supply of pre-school education services to its students against a fee, supply of goods, supply of transportation service to pre-school students and faculty/staff without any consideration as well as with some consideration, as well as on the supply of canteen service to its faculty and staff for some consideration,” the May 25 ruling articulated.
The ruling specified that these services could be acknowledged as “composite supplies” if the school is previously charging the money including the school fees. Before rulings have requested the employees of the companies to levy the GST on the canteen services. Various schools and other educational institutions are suffering from the GST issue on the same services.
Tax expert said that “This ruling has rightly interpreted the concept of composite supply and clarified that as pre-school education is exempt under GST, any other goods supplied along with it without any consideration would qualify as composite supplies and a nil rate of tax would be applicable,”
The problem of whether an item or service like money for the school bus that is provided with the school fees is liable to pay the tax is revealed on the grounds of how the service is furnished. Particularly when there is no GST levied on the school fees. Beneath the GST platform, the supply of these items could be described as a composite supply or a mixed supply.
