GST: Will a tax be levied on canteen and bus services provided by schools? Here’s what the decision says

New Delhi: In what would come as a respite for several schools across the country, the Maharashtra Authority for Advance Rulings (AAR), in a ruling, said the canteen and transport services offered by the schools will only attract not the Goods and Services Tax (GST).

The organization was discussing whether these services provided by schools and the amounts they charge should be subject to the GST. No tax is levied on tuition fees, as per the GST framework.

“Zero rate of tax on the provision of preschool education services to its students for a fee, the supply of goods, the provision of transportation services to preschool students and teachers/staff without any consideration as well as with a certain consideration, as well as on providing canteen service to its teachers and staff for certain consideration,” the Maharashtra advance ruling authority said.

He added that these services can be considered “composite supplies” if the school already charges the money with tuition.

Related News

GST rate review plans on hold until inflation cools

GST rate review plans on hold until inflation cools

Related News

Service charge in restaurants

Service charge in restaurants: NRAI says levying service charge ‘not an unfair business practice’

What are the tax experts saying?

“That decision correctly interpreted the concept of a composite supply and clarified that since early childhood education is exempt from the GST, any other property supplied with it for no consideration would be considered a composite supply and a zero tax rate. would be applicable,” Economic Times quoted Harpreet Singh, Partner, KPMG India, as saying.

Under the GST, the supply of such services can be defined as a composite supply or a mixed supply. Whether an item or service, such as school bus money that comes with, for example, school fees, is taxed is decided based on how the service is provided.

Meanwhile, the group of ministers responsible for reviewing the GST on casinos, online gambling and racetracks recently finalized their report, favoring a 28% tax on services. The final report will now be discussed at the next GST Council meeting.
The Group of Ministers (GoM), chaired by Chief Minister of Meghalaya, Conrad Sangma, had at its previous meeting earlier this month unanimously decided to increase the tax rate on such services to 28 %.