Frequently Asked Questions (FAQs) on Swachh Bharat Cess (SBC)

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....te from which the provisions of Section 1 19 would come into effect (Notification No.21/2015-Service Tax, dated 6th November, 2015 refers). Simultaneously, Government has also notified levy of Swachh Bharat Cess at the rate of 0.5% on all taxable services. Effectively, the rate of SBC would be 0.5% and new rate of Service Tax plus SBC would be 14.5%. As such SBC translates into a tax of 50 paisa only on every one hundred rupees worth of taxable services. The proceeds from this cess will be exclusively used for Swachh Bharat initiatives. The Frequently Asked Questions (FAQs) on Swachh Bharat Cess (SBC) are as under:- Q.1 What is Swachh Bharat Cess (SBC)? Ans. It is a Cess which shall be levied and collected in accordance with the provi....

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....e levied, charged. collected and paid to Government independent of service tax. This needs to be charged separately on the invoice, accounted for separately in the books of account and paid separately under separate accounting code. SBC may be charged separately after service tax as a different line item in invoice. It can be accounted and treated similarly to Education Cesses. Q. 8 Whether separate accounting code will be there for Swachh Bharat Cess? Ans. Yes, for payment of Swachh Bharat Cess, a separate accounting code has been notified vide Circular No. 188/7/2015-ST dated 16th November, 2015. These are as follows:- Swachh Bharat cess (Minor Head) Tax Collection Other Receipts Penalties Deduct Refunds 0044-00-50....

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.... the Finance Act, 1994, is made applicable to SBC. In this context, to clarify, Government has issued Notification No. 24/2015-Service Tax dated 12th November, 2015 to provide that reverse charge under Notification No.30/2012-Service Tax dated 20th June, 2012 shall be applicable for the purpose of levy of Swachh Bharat Cess mutatis mutandis. Q.13 How will SBC be calculated for services where abatement is allowed? Ans. Taxable services, on which service tax is leviable on a certain percentage of value of taxable service, will attract SBC on the same percentage of value as provided in the Notification No. 26/2012-Service Tax, dated 20th June, 2012. So, this Notification would apply for SBC also in the same manner as it applies for servi....

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....ayment is received prior to that date and invoice in respect of such service is not issued by 29^th Nov, 2015. Q. 16 How would the tax (Service Tax and SBC) be calculated on services covered under Rule 2A, 2B or 2C of Service Tax (Determination of Value) Rules, 2006. ? Ans. The tax (Service Tax and SBC) on services covered by Rule 2A, 2B or 2C of Service Tax (Determination of Value) Rules, 2006, would be computed by multiplying the value determined in accordance with these respective rules with [14% + 0.5%]. Therefore, effective rate of Service Tax plus SBC in case of original works and other than original works under the works contract service would be 5.8% [(14% + 0.5%)*40%] and 10.15% [(14% + 0.5%)*70%] respectively. Similar, would....