Service of providing cooked food to educational institution

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puja chitlangiya (Querist)
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01 January 2013 i am in a contract with an educational institution, whereby the educational institution provides raw material- vegetables, dairy, and rice. We provide gas, and other cooking material including staff for cooking the food for the students.We give them a bill for providing Professional services for running the mess.
Please suggest whether we shall be able to claim exemption under entry no. 9 of mega exmption notification under auxillary educational services.

Arun Gulati

Arun Gulati (Expert)
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01 January 2013 under entry 9 of Notification No. 25/2012 it is provided that "Services provided to or by an educational institution in respect of education exempted from service tax, by way of,—
(a) auxiliary educational services;"

education exempted from service tax is quite important here, meaning hereby if that education institution is exempted then auxillary services provided to that institution is exempt. In my view, you are also not satisfying the definition of “auxiliary educational services” which means any services relating to imparting any skill, knowledge, education or development of course content or any other knowledge – enhancement activity, whether for the students or the faculty, or any other services which educational institutions ordinarily carry out themselves but may obtain as outsourced services from any other person, including services relating to admission to such institution, conduct of examination, catering for the students under any mid-day meals scheme sponsored by Government, or transportation of students, faculty or staff of such institution."

puja chitlangiya

puja chitlangiya (Querist)
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02 January 2013 sir, in the event that i dont satisfy the definition, and cant claim the exemption , who shall bear the service tax, if the school is exempted.
Service tax as we know is an indirect tax collected from client and paid to govt.

Kaushik Vinod

Kaushik Vinod (Expert)
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02 January 2013 Dear Puja,

As per Section 66F if the main Service is Exempt then it does not mean that ancillary services used to provide that Service is also not liable to tax.School has to pay the tax and you have to charge the tax.
CENVAT shall accumulate in the books of School and not at your end.

Thanks

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