Blog on Circular No. 149/05/2021-GST: GST Exemption on Food Supply in Schools & Anganwadis
<h4><strong>Introduction</strong></h4><p>The <strong>Central Board of Indirect Taxes and Customs (CBIC)</strong> issued <strong>Circular No. 149/05/2021-GST</strong> on <strong>June 17, 2021</strong>, providing <strong>clarifications on the applicability of GST on food supply in schools and Anganwadis</strong>. The clarification is crucial for institutions engaged in providing <strong>mid-day meals and other catering services</strong> in <strong>educational institutions</strong> and ensures <strong>no GST burden on government-funded or donation-supported meal programs</strong>.</p><hr><h3><strong>Key Highlights of the Circular</strong></h3><h4><strong>1. GST Exemption on Catering Services for Educational Institutions</strong></h4><ul><li>As per <strong>Entry 66(b)(ii) of Notification No. 12/2017-Central Tax (Rate)</strong>, issued on <strong>June 28, 2017</strong>:<ul><li><strong>Catering services provided to educational institutions, including mid-day meals sponsored by the government, are exempt from GST</strong>.</li><li>The exemption <strong>covers all schools, including pre-schools</strong>.</li></ul></li></ul><h4><strong>2. Anganwadis Included Under the Definition of Educational Institutions</strong></h4><ul><li>The circular clarifies that <strong>Anganwadis provide pre-school non-formal education</strong>.</li><li>Since <strong>educational institutions</strong> include <strong>pre-schools</strong>, <strong>Anganwadis also qualify for GST exemption on food services</strong>.</li></ul><h4><strong>3. Funding Source Does Not Affect GST Exemption</strong></h4><ul><li><strong>Even if mid-day meals or food services are funded through corporate donations instead of government grants</strong>, they will still be <strong>exempt from GST</strong>.</li><li>This clarification removes ambiguity regarding <strong>funding sources and GST applicability</strong>.</li></ul><h4><strong>4. Impact of the Clarification</strong></h4><ul><li><strong>Schools, Anganwadis, and meal providers</strong> do not need to worry about <strong>GST liabilities</strong> when serving food.</li><li><strong>Donors supporting mid-day meal schemes</strong> can <strong>contribute without GST implications</strong>.</li><li>This supports the <strong>government’s initiative to provide free meals to children</strong> and encourages <strong>more participation from corporate donors</strong>.<a href="https://cms.plasament.com/storage/nisha/circular-refund-149.pdf">circular_refund_149</a><br> </li></ul>