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Notification No. 22/2015-Service Tax G.S.R. —(E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) read with sub-section (5) of section 119 of the Finance Act, 2015 (20 of 2015), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts all taxable services from payment of such amount of the Swachh Bharat Cess leviable under sub-section (2) of section 119 of the said Act, which is in excess of Swachh Bharat Cess calculated at the rate of 0.5 percent. of the value of taxable services:
Provided that Swachh Bharat Cess shall not be leviable on services which are exempt from service tax by a notification issued under sub-section (1) of section 93 of the Finance Act, 1994 or otherwise not leviable to service tax under section 66B of the Finance Act, 1994.This notification shall come into force from the 15th day of November, 2015. [F.No. 354/129/2015 – TRU]
Yes – Initially at the time of issuance of Finance Budget 2015, there were indications that SCB would be imposed on few selected services. However the notification issued by government has provided that it shall apply on all the services except the following:
– Mega Exempted Services vide Notification No. 25/2012-ST dated June 20, 2012.
– Services exempted as specified to certain extent under the Abatement Notification No. 26/2012-ST dated June 20, 2012.
Effective rate of service tax post introduction of SBC would be 14.5%.
SBC would be levied, charged, collected and paid to government independent of service tax. This needs to be charged separately on the invoice, needs to be accounted separately in the books of account and needs to be paid separately under separate accounting code which may be notified separately.
The impact of introduction of SBC on different situations is summarized below. (assuming that applicable rate is determined as per Rule 4 of Point of Taxation Rules, 2011)
Impact of imposition of Swachh Bharat Cess | |||
Service provided | Invoice issued | Payment received | Rate |
Before 15-11-15 | On or After 15-11-15 | On or After 15-11-15 | 14.50% |
Before 15-11-15 | Before 15-11-15 | On or After 15-11-15 | 14.00% |
Before 15-11-15 | On or After 15-11-15 | Before 15-11-15 | 14.00% |
On or After 15-11-15 | Before 15-11-15 | On or After 15-11-15 | 14.50% |
On or After 15-11-15 | Before 15-11-15 | Before 15-11-15 | 14.00% |
On or After 15-11-15 | On or After 15-11-15 | Before 15-11-15 | 14.50% |
5. Whether SBC paid on input service would be eligible as credit?
There is no amendment in the Cenvat Credit Rules, 2004 regarding a ailment and utilization of SBC. In the absence of the same, credit would not be admissible. However industry is expecting clarification on this from CBEC.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Hope the information will assist you in your Professional endeavors. For query or help, contact: singh@carajput.com or call at 9555555480
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