Swachh Bharat Cecc .50 % input credit shoud be elligible

[Asked by Guest]

Dear Sir,

As per notification 22/2015 dated-06-11-2015 swath Bharat Cess .5 % would be applicable for all services.

But not clarify regarding the input credit whether this cess is eligible for input credit or not.

My question is that this cess is applicable in case of RCM also ?

If we paid in under RCM is it eligible for input credit or not ?

Is there any special Accounting code for payment this cess to CBES ?

Regards

Swapneswar

[Manoj Agarwal]

Point No. 12 of my article:-

12. The moot question is whether Cenvat Credit is available on SBC?

Most of the subject experts are of the view that since SBC is not specifically covered under Rule 3 of Cenvat Credit Rule, 2004, cenvat credit is unavailable, unless Rule 3 is amended to this effect. With due respect, the author differs in opinion and is of the view that cenvat credit can be availed on SBC. However, unless the government clarifies the issue and allow cenvat credit, the SAME WOULD BE SUBJECT TO LITIGATION. The issue requires detailed analysis and may be taken up in subsequent write-up.

So, I have already mentioned that taking of cenvat credit would be subject to litigation and it is better if the government clarifies the same or amend Rule 3 to expressly include the same. But I still maintain my view that cenvat credit of SBC can be availed.

[Ganeshan Kalyani]

With due respect to all the replies above it is good to wait for departmental clarification for SBC credit. This is so because in practice an assesse had taken credit of 2% & 1% Education cess lying in books as of 28.03.2015. The department issued notice to reverse the credit along with interest and penalty. Which is why it is always better to be on safer side by waiting for a calificatory notification from department.

[Ganeshan Kalyani]

Sorry 28.03.2015 written wrongly instead of 28.02.2015. Further department had given clarification only for taking credit of inputs received after 28.02.2015 and had not said so far for the credit of 2% & 1% education cess and secondary and higher education cess. Similarly SBC credit taken before clarification may welcome litigation. This is my view.

AI Summary

Input tax credit eligibility for Swachh Bharat cess remains barred; payment must be made in cash unless rules are amended.
The central legal point is whether Swachh Bharat Cess qualifies for Cenvat credit. SBC was levied on services and under reverse charge but was not added to the duties enumerated in the Cenvat Credit Rules; CBEC FAQs state credit is not available and SBC must be paid in cash. Commentators debated judicial reliance and provisional protest filings to preserve claims, while others advised awaiting departmental amendment or clarification. Notifications adjusted levy and reverse charge application but did not alter creditability.