What’s Swachh Bharat Cess:
The Bharat Abhiyan, a mass movement launched on October 2, 2014, aims to work towards a Clean India. The purpose of the movement is to boost sanitation in both urban and rural India. To the end, the Government of India introduced an additional cess known as ‘Swachh Bharat Cess’ at 0.5% on all taxable services to fund Swachh Bharat initiatives. Consequently, the current service tax rate including the Swachh Bharat Cess stands at 14.50%. The Swachh Bharat Cess which came into effect on November 15th, 2015 (Notification no.21/2015) is collected as per provisions of Chapter VI (Section 119) of the Finance Act, 2015. It is important to note that the Swachh Bharat Cess is not levied on services fully exempt from service tax or those which fall into the category of the negative list of services.
Features of Swachh Bharat Cess:
The salient features of the Swachh Bharat Cess are listed below:
- Services: The Swachh Bharat Cess is applicable on services such as air-conditioned restaurants, road and rail services, insurance premiums and lottery services among others
- Utilization: The proceeds of the Swachh Bharat Cess are pooled into the Consolidated Fund of India for efficient utilisation for promoting the Swachh Bharat movement
- Invoice: The Swachh Bharat Cess is charged as a separate item in an invoice. The Swachh cess is paid under a different accounting code and accounted for separately
- Rate: The Swachh Bharat Cess is not calculated on service tax per se but on the taxable value of a service.The Swachh Bharat Cess is levied at 0.5% on the value of taxable services
- Taxable Services: As per government notification, Swachh Bharat Cess is applicable on taxable services except those which are fully exempt from service tax (as per section 93(1) of the Finance Act, 1994 or those which cannot be levied (as per section 66B of the Finance Act, 1994)
- Reverse Charge: As per section 119(5) of the Finance Act, 2015 and Chapter V of the Finance Act, 1994, reverse charge (notification no.30/2012) will apply for the levy of the Swachh Bharat Cess. As per Rule 7 of the Point of Taxation Rules, the point of taxation is when consideration is duly paid to a service provider
- Cenvat Credit: The Swachh Bharat Cess is not integrated in the Cenvat Credit Chain. In other words, Swachh Bharat Cess cannot be paid by using credit of any other tax
- Calculation: Swachh Bharat Cess is based on the value as per Service Tax (Determination of Value) Rules, 2006. The Swachh Bharat Cess vis-a-vis services related to serving food at a restaurant or joint, with air-conditioning facilities, is 0.5% of the 40% of the total amount.
- Refund: SEZ Units are entitled to refund of the Swachh Bharat Cess paid on specific services
- Point of Taxation:
- There is no lability of Swachh Bharat Cess in cases where invoice is raised prior to 15th November, 2015. Also, there is no liability if invoice is raised within 14 days, i.e. before 29th November, 2015
- The Swachh Bharat Cess will be levied on services provided on or after November 15th, 2015 (invoice and payments which are issued and received on or after the said date)
- Swachh Bharat Cess will be levied on services offered on or after November 15th, 2015 even if the payment is received before the said date and invoice is not issued by November 29th, 2015
The various scenarios for point of taxation are listed below:
- TAX
- Income Tax Refund Status
- Pay Tax with Credit Cards
- Direct Tax
- Indirect Tax
- Stamp Duty
- Education Cess
- Entry Tax
- Road Tax
- Union Budget
- Income Declaration Scheme
- Tax Rebate
- Tax Planning
- Self Assessment Tax
- OLTAS
- Green Tax
- Deferred Tax
- Inflation Index
- Advance Tax
- HRA Calculation
- Gratuity
- Gross Salary and CTC
- Professional Tax
- Gross Salary
- VAT Return
- VAT Calculation
- VAT and Service Tax On Restaurant Bill
- VAT
- Sales Tax
- Central Sales Tax (CST)
- Capital Gains Tax on Shares
- Capital Gains Tax
- Capital Gain Calculator
- Service Tax
- Service Tax On Rent
- Filing Service Tax Return
- Goods And Service Tax (GST)
- ESOP
- 7th Pay Commission
- Income Tax
- Income Tax Slab
- Income Tax Slabs 2017-2018
- Income Tax Return
- Income Tax Refund
- Income Tax for Senior Citizens
- Which ITR To File
- Medical Reimbursement
- ITR-V to Income Tax Department
- Income Tax For Pensioners
- Income Tax Calculator
- Income From Other Sources
- Income From House Property
- How To Calculate Income Tax
- e-Filing ITR
- TDS
- How To Calculate TDS From Salary
- How To Claim TDS Refund
- Conveyance Allowance
- Dearness Allowance
- Leave Travel Allowance
- Special Allowance
- TDS Rates Chart
- TDS Rates 2016
- Medical Allowance
- Tax Benefit On Tuition Fees
- City Compensation Allowance
- Double Taxation Avoidance Agreement
- Tax Exemptions
- Tax Benefits On Loans
- Tan Number
- How To File TDS Returns
- Tax Deductions Under 80C
- Tax Benefits For Consultants
- Advance Tax Exception
- TDS on Immovable Property
- Fringe Benefit Tax
- Tax Benefits For Education Loans
- Agriculture in Union Budget
- Union Budget for Rural Sector
- Budget for Youth Employment
- Budget for Health Care Sector
- Railway Budget
- Union Budget for Energy Sector
- Union Budget for Financial Sector
- Fiscal Situation
- Funding of Political Parties in Budget
- Union Budget for Defence Sector
- Union Budget Expenditure
- Union Budget Receipts
- Budget Appropriation Bill
- Finance Bill
- Union Budget Analysis
- Union Budget for Senior Citizen
- Union Budget for Logistics Sector
- Maternity Benefits from Union Budget
- Deduction Under Section 80G
- Deductions Under 80C
- Form 10C
- Form 16
- Form 16 And 16A
- Form 16A
- Form 16B
- Form 24G
- Form 24Q,26Q,27Q,27EQ,27D
- Form 26AS
- Form 27C
- Form 49B
- Section 234A, 234B And 234C
- Section 24
- Section 80C and 80U
- Section 80CCF
- Section 80CCG
- Section 80DD - Deductions On Medical Expenditure
- Section 80E
- Section 80U
- Section 87A