Supply of goods versus catering service determined exemption eligibility, while the product did not fit the cited tariff entries.

The AAR held that the exemption under entry 66(b)(ii) of Notification No. 12/2017-Central Tax (Rate) was unavailable because the applicant supplied goods, not catering services, to CDPO and anganwadi centres; the related circular and clarification therefore did not apply. On classification, the powdered cereal-and-pulse mixture known as "Pushti" did not squarely fit the tariff descriptions for flour or meal/powder covered by entries 78 of Notification No. 02/2017-Central Tax (Rate) and 59 of Notification No. 01/2017-Central Tax (Rate), as amended, so it was not brought within those cited entries as pre-packaged and labelled goods.

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Issues: (i) Whether the applicant's supply to CDPO and anganwadi centres qualified for exemption under entry 66(b)(ii) of Notification No. 12/2017-Central Tax (Rate) and the corresponding circular and clarification. (ii) Whether the product 'Pushti' was classifiable as pre-packaged and labelled goods under entries 78 of Notification No. 02/2017-Central Tax (Rate) and 59 of Notification No. 01/2017-Central Tax (Rate), as amended.

Issue (i): Whether the applicant's supply to CDPO and anganwadi centres qualified for exemption under entry 66(b)(ii) of Notification No. 12/2017-Central Tax (Rate) and the corresponding circular and clarification.

Analysis: The exemption under entry 66 applies to services provided to an educational institution by way of catering, including mid-day meals. The applicant was found to be supplying goods, not catering services. Since the supply was of goods and not a service, the service-based exemption notification and the related circular and State clarification were held inapplicable.

Conclusion: The exemption under entry 66(b)(ii) was not available, and the circular and clarification did not apply.

Issue (ii): Whether the product 'Pushti' was classifiable as pre-packaged and labelled goods under entries 78 of Notification No. 02/2017-Central Tax (Rate) and 59 of Notification No. 01/2017-Central Tax (Rate), as amended.

Analysis: 'Pushti' was described as a powdered mixture of cereals, pulses and sugar. The entries relied upon covered flour or meal/powder of specified dried leguminous vegetables and related products. On the facts, the product did not fit the scope of those entries, and the amended expressions concerning pre-packaged and labelled goods did not bring it within the cited tariff entries.

Conclusion: 'Pushti' was not taxed under entry 78 of Notification No. 02/2017-Central Tax (Rate) or entry 59 of Notification No. 01/2017-Central Tax (Rate), as amended.

Final Conclusion: The ruling denied the claimed service exemption but also held that the product did not fall under the cited tariff entries for taxation, resulting in a mixed outcome on the questions referred.

Ratio Decidendi: A service exemption applicable to catering for educational institutions cannot be claimed where the transaction is a supply of goods, and a product must squarely answer the description in the tariff entry before it can be taxed under that entry.

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