Mid-day meal exempted from Service Tax

Non-governmental organisations (NGOs) supplying food for the mid-day meal scheme will not have to pay Service Tax, said a government notification.

Last Updated: Sep 07, 2010, 18:30 PM IST

New Delhi: Non-governmental organisations
(NGOs) supplying food for the mid-day meal scheme will not
have to pay Service Tax, said a government notification.

"The Central government... hereby exempts the taxable
service of outdoor catering... if the same is provided by a
non-government organisation registered under any Central
Act or State Act, under the centrally assisted Mid-Day Meal
Scheme, from the whole of service tax leviable...," the
notification from the Revenue Department said.

This comes a couple of months after the Centre took the
catering service of the Indian Railway out of the ambit of
service tax.

Service Tax on outdoor catering was first introduced in
1997, before being withdrawn a year later. It was again made a
part of the tax regime as part of the amendments to service
tax under the Finance (No 2) Bill, 2004, presented during the
2004-05 Union Budget.

The scheme, officially known as the National Programme of
Nutritional Support to Primary Education (NPNSPE), was
launched in 1995 with the objective of giving a boost to
universalisation of primary education by increasing enrolment,
attendance and retention and also improving the nutritional
status of children in primary classes.

Under the scheme, cooked mid-day meals with a nutritional
content of 450 calories and 12 grams of protein is served to
children studying at the primary level.

More than 12 crore children in around 10 lakh schools
across the country are covered under the scheme.

PTI