Swachh Bharat Cess

[Guest]

Whether swachh bharat cess is applicable on advance payment ?

[KASTURI SETHI]

Answer to your question is available in FAQ issued by CBEC. Relevant portion is extracted below:-

Q.15 What would be the point of taxation for Swachh Bharat Cess?

Ans. As regards Point of Taxation, since this levy has come for the first time, all services (except those services which are in the Negative List or are wholly exempt from service tax) are being subjected to SBC for the first time. SBC, therefore, is a new levy, which was not in existence earlier. Hence, rule 5 of the Point of Taxation Rules would be applicable in this case. Therefore, 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 lability of Swachh Bharat Cess. In cases 5 where payment has been received before the service became taxable and invoice is raised within 14 days, i.e. upto 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.

[Ganeshan Kalyani]

Whether you are provider of service or recipient of service ?

[KASTURI SETHI]

Sir,

I think he is a service provider or asking for the information as service provider. My wild guess.

[DR.MARIAPPAN GOVINDARAJAN]

Dear Mangesh Khedkar,

Please give your query in detail. Don't give place for assumptions which will give some time goes to a wrong way. If you are a service provider the SBC is applicable since the provisions of service tax are applicable to SBC.

AI Summary

Point of Taxation Rule: Swachh Bharat Cess applies only when service is provided, invoiced and paid on or after levy commencement. Applicability of Swachh Bharat Cess is determined by Point of Taxation Rule 5: the cess is not leviable if payment and invoice precede the levy commencement or if payment precedes but invoice is issued within the short extension period; the cess is payable where service provision, invoicing and payment occur on or after the commencement date, or where service provision occurs on or after the commencement date and the invoice is not issued within the short extension period despite earlier payment.