The students from the Kashmir Valley have also said that they would stay away from any kind of festivity on the campus.
The lunch is being organized at the university's guest house.
In a statement, the Kashmiri students said that they were dismayed by the invite, which has political connotation and "aimed at rubbing salts on their wounds".
"We take this as an opportunity to reject Delhi's authoritarianism and drama played in Parliament on August 5," the statement said.
Recently, Jammu and Kashmir Governor Satya Pal Malik had sanctioned Rs 1 lakh each to the designated liaison officers for organizing the Eid festivities.
According to Kashmiri students at the AMU, Malik has no sympathy for them and the sanction of Rs 1 lakh and an Eid invite is to buy their consent for the undemocratic means adopted by the Indian government.
"The acceptance of the invitation would be an insult to the courage of our parents who are surviving the massive militarization and absolute clampdown in Jammu and Kashmir," the statement read.
A senior Kashmiri student said the government never organized any such special meeting for them in the past five years.
"Suddenly, they have started showing their concern for Kashmiris," he said.
AMU spokesperson Shafey Kidwai, meanwhile, said he was not aware of the boycott as the university had not received any communication from the Kashmiri students
( With inputs from IANS )