Hostel Mess Services to attract 5 % GST

NewDelhi Jan 10: In a major shock to students who reside in hostels of educational institutions the government has said that 5 % GST would be applicable for the hostel mess facility.

The announcement comes in wake of people seeking clarifications whether GST on mess services was exempted if the service was provided by the educational institution itself.

However, CBEC has clarified regarding the tax liability and the rate of goods and services tax (GST) leviable on services provided by a college hostel mess. the tax department has stated that "Supply of food or drink provided by a mess or canteen is taxable at 5% without Input Tax Credit... It is immaterial whether the service is provided by the educational institution itself or the institution outsources the activity to an outside contractor."



The statement comes as shock to many educational institutions as they thought they were exempted from the tax as themselves were providing services and they have not outsourced.Many institutions have decided to pass on the burden to the students as they don't receive ITC and this may lead to increase the mess fees of students.