The Government has announced 15th November, 2015 as the date from which Swachh Bharat Cess will be applicable. The rate of Swachh Bharat Cess shall be 0.5%.
Swachh Bharat Cess
Q.1 What is Swachh Bharat Cess (SBC)?
Ans. Tax which shall be levied and collected in accordance with the provisions of Chapter VI of the Finance Act, 2015,called Swachh Bharat Cess, as service tax on all the taxable services at the rate of 0.5% of the value of taxable service. Due to introduction of this new tax service tax will be 14.5%.
Q.2 Whether SBC would be applicable on exempted services and services in the negative list?
Ans. No Swachh Bharat Cess is not applicable on services which are fully exempt from service tax or those covered under the negative list of services.
Q.3 Why this tax has been imposed?
Ans. Swachh Bharat Cess has been imposed for the purposes of financing and promoting Clean India initiatives or any purpose related to same.
Q.4 How will the SBC be calculated?
Ans. This tax will be calculated in the same way as that of service tax.
Q.5 Whether SBC would be required to be mentioned separately in invoice?
Ans. Yes SBC is required to charged, collected and paid to government independent of service tax. This charge needs to be mentioned separately on the invoice and accounted separately.
Q.6. What would be effective service tax once SBC is introduced?
Ans. Effective rate of service tax plus Swacch Bharat Cess post introduction of SBC, would be [14% + 0.5%].
Q.7 Where will the money collected under SBC go?
Ans. The new tax Swacch Bharat Cess will be credited in separate consolidated fund and will be used for purpose of promoting Clean India Movement.
What is your view on this new tax by the government Swachh Bharat Cess (SBC)?
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