It is a nice article. Thank you for a viid analysis of the issue. As per the said circular:
Supply of food or drink provided by a mess or canteen is taxable at 5% without Input Tax Credit . X X X It is immaterial whether the service is provided by the educational institution itself or the institution outsources the activity to an outside contractor."
The considerations received will be taxable if the same fits into the definition of supply. It can not be inferred that the catering services provided by the institutions are without any business motive. Many organisations make a lot of profit from the supply of foods.
Secondly, even if it is taxable, the services provided to its own staff or students will not be taxable.
But the outsourced catering people will be taxable.