Circular No. FAQ-SBC - Dated: 16-11-2015 - SWACHH BHARAT CESS (SBC)-FREQUENTLY ASKED QUESTIONS (FAQ)

Q.12 How will the SBC be calculated for services under reverse charge mechanism?

Ans. In case of reverse charge under section 68(2) of the Finance Act, 1994, the liability has been shifted from service provider to the service recipient. As per section 119 (5) of the Finance Act, 2015, the provisions of Chapter V of the Finance Act, 1994, and the rules made thereunder are applicable to SBC also. Thus, the reverse charge under section 68(2) of 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

Swachh Bharat Cess reverse charge shifts liability to the service recipient, applying existing reverse charge notifications mutatis mutandis. Swachh Bharat Cess for services under reverse charge is payable by the service recipient: Chapter V provisions apply to SBC, and government notification makes the existing service tax reverse charge notification applicable to SBC mutatis mutandis, so recipients compute and discharge SBC under the same reverse charge rules.