Regarding SBC

[Asked by Guest]

Dear sir,

I have given contract to security agency (company) & vendor raised bill month of November 2015 with invoice date 30 Nov. 2015 but vendor charge Swachh Bharat Cess on only 16 days service value. hence please suggest it is correct or not.

[YAGAY and SUN]

Point of taxation: As Cess is a new levy and is applicable on all taxable services, Rule 5 of Point of Taxation Rules, 2011 will apply. The impact vis-à-vis the point of taxation is tabulated as under:
Event Applicability of Cess
Payment received prior to November 15, 2015 and Invoice issued prior to November 15, 2015 No
Payment received prior to November 15, 2015 and Invoice issued within 14 days of levy (i.e. before November 29, 2015) No
Payment received prior to November 15, 2015, services provided on or after November 15, 2015 and invoice issued after November 29, 2015 (after 14 days of levy) Yes
Payment received, services provided and invoice issued on or after November 15, 2015 Yes

[Ganeshan Kalyani]

In my view since invoice is raised after 29th November the SBC shall be on entire invoice amount and not only for some period. How can you segregate the invoice amount when it has not been specifically given in point of taxation rule. I welcome experts opinion in this respect.

[DR.MARIAPPAN GOVINDARAJAN]

Vendor has to pay SBC for the full invoice amount. It is my opinion.

[KASTURI SETHI]

I endorse the views of both Sh.Ganeshan Kalyani, Sir and Sh.Marriapan Govindarajan, Sir inasmuch as in this case payment has been received after 15.11.2015 and invoice has been issued after 29.11.15 (after crossing 14 days, counted from 15.11.15) and Service has been provided before and after 15.11.2015. Therefore as per Point of Taxation Rule SBC is to be paid on whole amount of invoice.

[Ganeshan Kalyani]

Thanks Sir.

AI Summary

Swachh Bharat Cess applicability: invoice issued after the statutory point-of-taxation window makes the cess due on entire invoice.
The operative rule is the Point of Taxation Rules, 2011: where payment is received or an invoice is issued after the transitional window following the levy commencement, and services span dates before and after the levy, Swachh Bharat Cess is chargeable on the full invoice amount; an invoice issued after the transitional period therefore attracts SBC on the entire billed value rather than a pro-rated portion.