Hi,
Yes, it is legal. They are liable for the charging GST from students and staff, whether Such facility is either run by the institution/students themselves or is outsourced to a third person.
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.
Happy Reading !!
Team - GST Mithra
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