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Service tax on outdoor catering was first introduced in 1997, before being withdrawn a year later.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.
