SBC ON SERVICE PROVIDED BEFORE 15.11.2015

[hardik thacker]

RESPECTED MEMBERS OF TMI,

WHETHER SBC NOT APPLICABLE ON ALL CASES, WHERE SERVICE IS PROVIDED BEFORE 15.11.2015 IRRESPECTIVE OF DATE OF PAYMENT AND DATE OF ISSUE OF INVOICE ??

I CAN NOT GET CLARITY FROM RULE 5 OF POINT OF TAXATION RULES..

THANKS....

[KASTURI SETHI]

Dear Hardik Thackar Ji,

Solution to your problem is available in the article dated 9.11.2015 written by Sh. M.Govindarajan and in the article dated 10.11.2015 written by Sh.Ashish Chaudhary. Kindly go through both the articles which solve all problems pertaining to SB Cess.

[Rajagopalan Ranganathan]

Sir,

As per the answer provided to Question No. 15 of FAQ dated 16.11.2015 issued by CBEC ,-

in cases where payment has been received and invoice is raised before the service becomes taxable, i.e. prior to 15th November, 2015, there is no liability of Swachh Bharat Cess.

In cases where payment has been received before the service became taxable and invoice is raised within 14 days, i.e. up to 29th November, 2015, even then the service tax liability does not arise.

Swachh Bharat Cess will be payable on services which are provided on or after 15th Nov, 2015, invoice in respect of which is issued on or after that date and payment is also received on or after that date.

Swachh Bharat Cess will also be payable where service is provided on or after 15th Nov, 2015 but payment is received prior to that date and invoice in respect of such service is not issued by 29th Nov, 2015.

In your case the service was provided prior to 15.11.2015. If you have issued the invoice on or before 29.11.2015 no SBC is payable.

[Ganeshan Kalyani]

The following table depicts the applicability of Swachh Bharat Cess in the transition period.

Service provided	Invoice Issued	Payment made	Effective rate of tax
Before 15.11.2015	After 15.11.2015	After 15.11.2015	New Rate
Before 15.11.2015	Before 15.11.2015	After 15.11.2015	Old Rate
Before 15.11.2015	After 15.11.2015	Before 15.11.2015	Old Rate
After 15.11.2015	Before 15.11.2015	After 15.11.2015	New Rate
After 15.11.2015	Before 15.11.2015	Before 15.11.2015	Old Rate
After 15.11.2015	After 15.11.2015	Before 15.11.2015	New Rate

[hardik thacker]

Sir,

As per Clarification / FAQs issued by CBEC, the SBC is new levy and accordingly Rule 5 would be applicable.

The rate structure mentioned in table is as per rule 4, which would be apply in case of "change in rate of service tax".

Please clarify the issue

[hardik thacker]

Respected Sethi Sir,

M. Govindrajan Sir's article is before of clarification issued by CBEC.

Sir had suggested rate structure as per rule 4.

Rajgopalan Sir's answer is seems satisfactory.

AI Summary

Swachh Bharat Cess applicability: services provided before commencement are not subject to SBC when invoice and payment precede the transition deadline. Applicability of Swachh Bharat Cess turns on whether service provision, invoicing and payment occurred before the levy's commencement; services provided before that date are exempt where invoice and payment precede the levy or where payment precedes the levy and invoice is issued within the transitional window. The Point of Taxation Rules' transitional provisions, not the general change-in-rate rule, determine whether the new cess applies.