This circular provides clarification on the taxability and applicable GST rate on services supplied by college or educational institution hostel mess facilities.

It clarifies that educational institutions commonly provide mess or canteen facilities for supply of food to students and staff. Such mess services may be operated directly by the institution or students themselves, or the activity may be outsourced to an external contractor. In all such cases, the nature of supply remains the same.

The circular states that the supply of food or drinks by a mess or canteen is taxable at the rate of 5% GST, without eligibility for input tax credit, in terms of Serial No. 7(i) of Notification No. 11/2017–Central Tax (Rate), as amended by Notification No. 46/2017–Central Tax (Rate) dated 14 November 2017. The GST rate does not change based on whether the service is provided in-house by the educational institution or through an outsourced service provider.

Accordingly, hostel mess fees collected from students or staff are liable to GST at 5% without input tax credit, irrespective of the operational model of the mess facility.