Providing Mess Services in a Boarding School

[Devendra Agarwal]

Is VAT applicable on contract for running a mess (providing all meals on regular basis) - catering service  in Boarding School/College (it already included in negative list of services tax being an auxilliary service)?

AI Summary

VAT Applicability on Boarding School Mess Contracts: Registration Required if Turnover Exceeds Rs. 5 Lakhs Annually A query was raised regarding the applicability of VAT on contracts for running a mess in a boarding school, which is considered an auxiliary service and is included in the negative list for service tax. It was clarified that registration under the KVAT Act is required if the taxable turnover exceeds Rs. 5 lakhs annually or Rs. 40,000 monthly. While catering for government-sponsored midday meal schemes is exempt from service tax, the exemption for providing mess services in hostels is uncertain. Further clarification was sought on whether this constitutes a sale of food under the VAT Act if expenditure thresholds are exceeded.