Value for SBC

[Asked by Guest]

Dear sir,

We had given contract to SSI vendor in composite work (work contract service). vendor consider 70% value for service tax & 100% value for vat hence which value applicable for swachh bharat cess.

[Rajagopalan Ranganathan]

Sir,

For charging SBC the abated value on which service tax is paid is to be taken.

[Ganeshan Kalyani]

I agree with the reply submitted by Rajagopalan Sir.

[YAGAY and SUN]

Dear Mangesh,

In Maharashtra VAT Laws under Works Contract Tax, your vendor has option to levy VAT/WCT in following three way, namely:

1. On Actuals
2. On abated amount
3. Under Composition Schem

If your vendor charges VAT/WCT on 100% value then it means charges on VAT/WCT on service portion also which is not the mandate of VAT Laws. Discuss with your SSI Vendor about the correct levy of VAT/WCT under MVAT Act read with rules made there under.

Regards,

YAGAY and SUN

(Management, Business and Indirect Tax Consultants)

[Ram Babu singh]

SBC shall be charged on value of service portion i.e 70% of the value of work contract.

[Ganeshan Kalyani]

Yes it has been cleared by CBEC that SBC is a levy alike service tax and hence it will be charged like that of service tax.

[Surender Gupta]

Yes, I fully agree with the views as above of the experts.

If service tax is exempt, SBC will be exempt.

Where service tax is chargeable on abated rate, sbc will be charged at abated rate also.

Where service tax is charged at full rate on reduced value, sbc will also be charged at full rate on reduced value.

[DR.MARIAPPAN GOVINDARAJAN]

The views of Shri Surendra Gupta is self explanatory.

AI Summary

Swachh Bharat Cess on service value must follow service tax valuation, including abated or reduced taxable value.
Swachh Bharat Cess must be levied on the same value used for charging service tax: where service tax is charged on an abated or reduced value or on the service portion of a works contract, SBC is to be computed on that abated/reduced/service portion value; if service tax is exempt, SBC is not leviable. VAT valuation methods (actuals, abated, composition) do not independently determine SBC liability, and invoicing should be aligned so SBC follows service tax valuation.