7 GST Circulars issued today providing clarity on the following issues:

1. Clarification regarding applicability of GST on supply of food in Anganwadis and Schools

Services provided to an educational institution by way of catering, including any mid-day meals scheme sponsored by the Central Government, State Government, or Union territory, are exempted under entry 66 clause (b)(ii) of notice No. 12/2017-Central Tax (Rate) dated 28th June 2017. This section is for pre-school and elementary schools.

As a result, any food service offered to an educational institution is exempt from GST, according to mentioned entry 66. The entry goes on to say that such excluded services include mid-day meal service, which is specifically mentioned in the entry. As a result, the scope of this article is broad enough to include any food served to a school, including pre-school. In addition, Anganwadi provides non-formal pre-school education. As a result, the definition of the educational institution includes Anganwadi (as pre-school)

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2. Clarification regarding applicability of GST on the activity of construction of road where considerations are received in deferred payment (annuity)

GST is exempt on services that fall under heading 9967 (service code) and is provided in exchange for annuity payments [entry 23A of notification No. 12/2017-Central Tax].

“Supporting services in transportation” is covered under heading 9967, and code 996742 is for “operation services of National Highways, State Highways, Expressways, Roads & Streets; bridges and tunnel operation services.” “Service by way of access to a road or a bridge on payment of toll,” according to entry 23 of the notification, is exempt. Entry 23 and 23A together exempt access to a road or bridge, regardless of whether the consideration is in the form of a toll or annuity.

3. Clarification regarding GST on supply of various services by Central and State Board (such as National Board of Examination)

Services Provided:

  • to its students, instructors, and staff by an educational institution;
  • by an educational institution through the administration of an entrance examination in exchange for payment in the form of an admission fee;
  • Similarly, services provided to an educational institution in connection with admission to or the conduct of an examination are GST-free [sl. No. 66 (b)(iv)- 12/2017-CT(r)].

Educational institutions are defined as follows in section 2(y) of the aforementioned notification:

  • “educational institution” refers to a facility that provides services in the form of, –
  • Preschool education and education up to the equivalent of an upper secondary school diploma;
  • education as part of a curriculum for acquiring a qualification recognised by any current law; education as part of an approved vocational education course;”
4. Clarification regarding GST rate on construction services provided to a Government Entity w.r.t construction of a Ropeway on turnkey basis

Other than that covered by items I (ia), (ib), (ic), (id), (ie), and (if) above, a composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017 (other than that covered by items I (ia), (ib), (ic), (id), (ie), and (if) above) provided to the Central Government, State Government, Union Territory, a local authority

a civil structure or other original works primarily intended for purposes other than trade, industry, or any other business or profession;


5. GST on milling of wheat into flour or paddy into rice for distribution by State Governments under PDS

The entry at Sl. No. 3A of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 exempts “combined supply of goods and services in which the value of the said composite supply constitutes not more than 25% of the value of the said composite supply provided to the Central Government, State Government, Union territory or local authority or a governmental authority or a Government Entity by way of omission.”

Entry 28 of the 11th Schedule to the Constitution, which outlines the activities that can be assigned to a Panchayat under Article 243G of the Constitution, mentions Public Distribution. As a result, said entry No. 3A would apply to a composite supply of wheat milling and fortification by a miller, or of paddy into rice, as long as the value of goods supplied in such composite supply (fortification goods, packaging material, etc.) does not exceed 25% of the value of composite supply. Whether the value of commodities in such a composite supply is up to 25% is a question of fact that must be determined on a case-by-case basis.

6. Clarification regarding GST on service supplied by State Govt. to their undertakings or PSUs by way of guaranteeing loans

“Services supplied by the Central Government, State Governments, Union territory to their undertakings or Public Sector Undertakings (PSUs) by way of guaranteeing the loans taken by such undertakings or PSUs from banking companies and financial institutions” are exempted under Entry No. 34A of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017.

As a result, it is re-iterated, as proposed by the Council, that the Central or State Government’s guaranteeing of loans for its enterprise or PSU is particularly exempt under said entry No. 34A.

Any difficulties encountered in implementing this circular should be brought to the Board’s attention.

What is the date of Effective Voluntary Cancellation of Registration under the IT ACT? 

7. Clarification regarding GST rate on laterals/parts of Sprinklers or Drip Irrigation System

The purpose of this entry is to cover laterals (pipes intended for use only or primarily with sprinklers/drip irrigation systems) and other elements suited for use solely or primarily with ‘sprinklers or drip irrigation systems,’ as defined in Note 2 (b) of Section XVI of the HSN. As a result, even if provided separately, laterals/parts to be used mainly or mostly with sprinklers or drip irrigation systems, which are classifiable under category 8424, would be subject to a GST of 12%.

Any part of general use categorised in a heading other than 8424 in terms of Section Note and Chapter Notes to HSN, however, will be subject to GST at the rate applicable to that heading.

If there is any difficulty, it should be brought to the Board’s attention right away. A Hindi version will be available soon.