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

Circular Number 149/05/2021-GST dated 17th June 2021

  1. Representations have been received seeking clarification regarding
    applicability of GST on the issues as to whether serving of food in schools under
    Mid-Day Meals Scheme would be exempt if such supplies are funded by
    government grants and/or corporate donations. The issue was examined by GST
    Council in its 43rd meeting held on 28th May, 2021.
  2. Entry 66 clause (b)(ii) of notification No. 12/2017-Central Tax (Rate) dated
    28th June, 2017, exempts 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. This entry applies to pre-school and schools.
  3. Accordingly, as per said entry 66, any catering service provided to an
    educational institution is exempt from GST. The entry further mention that such
    exempt service includes mid- day meal service as specified in the entry. The scope of
    this entry is thus wide enough to cover any serving of any food to a school,
    including pre-school. Further, an Anganwadi interalia provides pre-school non formal education. Hence, aganwadi is covered by the definition of educational.
    institution (as pre-school_.
  4. Accordingly, as per recommendation of the GST Council, it is clarified that
    services provided to an educational institution by way of serving of food ( catering
    including mid- day meals) is exempt from levy of GST irrespective of its funding
    from government grants or corporate donations [under said entry 66 (b)(ii)].
    Educational institutions as defined in the notification include aganwadi. Hence,
    serving of food to anganwadi shall also be covered by said exemption, whether
    sponsored by government or through donation from corporates

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

Circular Number 153/09/2021-GST dated 17th June 2021

  1. Certain representations have been received seeking clarification whether
    composite supply of service by way of milling of wheat into wheat flour, alongwith
    fortification, by any person to a State Government for distribution of such wheat flour
    under Public Distribution System is eligible for exemption under entry No. 3A of
    Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, and also as regards the
    rate of GST on such milling, if it does not fall in said entry No. 3A. The issue has been
    examined by GST Council in its 43rd meeting held on 28th May, 2021.
  1. Entry at Sl. No. 3A of Notification No. 12/2017-Central Tax (Rate) dated
    28.06.2017 exempts “composite supply of goods and services in which the value of supply of
    goods constitutes not more than 25 per cent of the value of the said composite supply provided
    to the Central Government, State Government or Union territory or local authority or a
    Governmental authority or a Government Entity by way of any activity in relation to any
    function entrusted to a Panchayat under article 243G of the Constitution or in relation to any
    function entrusted to a Municipality under article 243W of the Constitution”.

3. As per the recommendation of the GST Council the issue is clarified as below.

3.1 Public Distribution specifically figures at entry 28 of the 11th Schedule to the
constitution, which lists the activities that may be entrusted to a Panchayat under
Article 243G of the Constitution. Hence, said entry No. 3A would apply to composite
supply of milling of wheat and fortification thereof by miller, or of paddy into rice,
provided that value of goods supplied in such composite supply (goods used for
fortification, packing material etc) does not exceed 25% of the value of composite
supply. It is a matter of fact as to whether the value of goods in such composite supply
is up to 25% and requires ascertainment on case-to-case basis.

3.2 In case the supply of service by way of milling of wheat into flour or of paddy
into rice, is not eligible for exemption under Sl. No. 3 A of Notification No. 12/2017-
Central Tax (Rate) dated 28.06.2017 for the reason that value of goods supply in such
a composite supply exceeds 25%, then the applicable GST rate would be 5% if such
composite supply is provided to a registered person, being a job work service (entry
No. 26 of notification No. 11/2017- Central Tax (Rate) dated 28.06.2017). Combined
reading of the definition of job-work [section 2(68), 2(94), 22, 24, 25 and section 51]
makes it clear that a person registered only for the purpose of deduction of tax under
section 51 of the CGST Act is also a registered person for the purposes of the said entry
No. 26, and thus said supply to such person is also entitled for 5% rate.

GST Rate on Goods as Recommended by The GST Council in Its 37th Meeting

The 37thGST Council met in Goa today under the Chairmanship of Union Finance & Corporate Affairs Minister Smt Nirmala Sitharaman  . The meeting was also attended by Union Minister of State for Finance & Corporate Affairs Shri Anurag Thakur besides Chief Minister of Goa Shri Pramod Sawant,  Finance Ministers of States & UTs and seniors officers of the Ministry of Finance .

The council   took the following decisions in respect to rates relating to goods.

  1. GST rates reduction, –
  2. 18% to 12% on parts of Slide Fasteners
  3. 18% to 5% on Marine Fuel 0.5% (FO)
  4. 12% to 5% on Wet Grinders(consisting stone as a grinder)
  5. 5% to Nil on:-
  6. Dried tamarind
  7. Plates and cups made up of leaves/ flowers/bark
  8. 3% to 0.25% on cut and polished semi- precious stones
  9. Applicable rate to 5% on specified goods for petroleum operations undertaken under Hydrocarbon Exploration Licensing Policy (HELP)


  1. Exemptions from GST/IGST on:-


  1. imports of specified defence goods not being manufactured indigenously (upto 2024)
  2. supply of goods and services to FIFA and other specified persons for organizing the Under-17 Women’s Football World Cup in India.
  3.  supply of goods and services to Food and Agriculture Organisation (FAO) for specified projects in India.



  1. GST rates have been recommended to be increased from, –
  1. 5% to 12% on goods, falling under chapter 86 of tariff like railway wagons, coaches, rolling stock (without refund of accumulated ITC). This is to address the concern of ITC accumulation with suppliers of these goods.
  2. 18% to 28% +12% compensation cess on caffeinated Beverages


  1. Measures for Export Promotion
  1. Exemption from GST/IGST:-
  1. at the time of import on Silver/Platinum by specified nominated agencies
  2. supply of Silver/Platinum by specified nominated agency to exporters for exports of Jewellery,
  1. Inclusion of Diamond India Limited (DIL) in the list of nominated agencies eligible for IGST exemption on imports of Gold/ Silver/Platinum so as to supply at Nil GST to Jewellery exporters.
  1. A uniform GST rate of 12% on Polypropylene/Polyethylene Woven and Non- Woven Bags and sacks, whether or not laminated, of a kind used for packing of goods (from present rates of 5%/12%/18%)


  1. GST concession in certain cases for specific period: –
  1. Exemption to Fishmeal for the period 01.07.17 to 30.09.19. There were doubts as regards taxability offishmeal in view of the interpretational issues. However, any tax collected for this period shall be required to be deposited.


  1. 12% GST duringthe period 1.07.2017 to 31.12.2018, on pulley, wheels and other parts (falling under Heading 8483) and used as parts of agricultural machinery.


  1. Passenger vehicles of engine capacity 1500 cc in case of diesel, 1200 cc in case of petroland length not exceeding 4000mm designed for carrying upto 9 persons attract compensation cess of 1% for petrol and 3% for diesel vehicle. Council recommended same compensation cess rate for vehicles having these specifications (length and engine capacity) but designed for carrying more than 10 persons but upto 13 persons. (Presently these vehicles attract compensation cess at the rate of 15%)


  1. Other miscellaneous Changes:
  • Aerated drink manufacturers shall be excluded from compositionscheme.
  • Option to pay GST at the rate of 18% on transaction value at the time of disposal of specified goods for petroleum operations (on which concessional GST rate of 5% was paid at the time of original supply) provided that the goods are certified by Director General Hydrocarbon(DGH) as non-serviceable.
  • Restriction on refund of compensation cess on tobacco products (in case of inverted duty structure)
  • Prescribing modalities for allowing concessions on spare parts imported temporarily by foreign airlines for repair of their aircraft, while in India in transit in terms of the Chicago Convention on Civil Aviation.
  • Certain other changes of technical nature for the sake of clarity in application of notification.


  1. Clarifications as regards applicability of GST rate in respect of certain goods recommended by GST Council which inter-alia includes: 
      1. Mere heating ofleguminous vegetables (gram/lentil) for removing moisture, or to soften and puff it or removing the skin, and not subjecting to any other processing or addition of any other ingredients (salt, oil etc.) would be classified under HS code 0713.
  1. All “mechanical sprayers” falling under HS Code 8424 would attract 12% GST.
  2. Parts like Solar Evacuation tubes for solar power based devices like solar water heater, solar steam, generation systems, would be eligible to 5% GST rate.
  1. Exclusive parts and accessories suitable for use solely or principally with a medical device (falling under headings 9018, 9019, 9021 or 9022) would fall in respective headings and attract GST at the concessional rate of 12%.
  2. Almond milk is classifiable under HS code 22029990 and attracts GST rate of 18%.
  3. Imported stores for Navy would be entitled to exemption from IGST

The rate changes shall be made effective with effect from 1st October, 2019.


[This note presents the decision of the GST Council in simple language for ease of understanding, which would be given effect to through Gazette notifications/circulars, which shall have force of law.]



(Release ID: 1585717)