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Swachh Bharat Cess Levid on All Taxable Services
Nov 16, 2015

The Government has notified levy of Swachh Bharat Cess at the rate of 0.5% on all taxable services from November 15. The rate of SBC is 0.5% and new rate of service tax plus Swachh Bharat Cess is 14.5%.

  • The proceeds from this cess will be exclusively used for Swachh Bharat initiatives. 

  • Eating out, telephony and travel become expensive with the Swachh Bharat cess on taxable services.

  • With the imposition of the cess, service tax rate has went up from 14 per cent to 14.5 per cent on all taxable services.

  • The Government expects to collect around Rs. 10,000 crore from Swachh Bharat cess for full year.

  • In the remaining months of this fiscal till March 31, 2016, the cess would yield about Rs. 3800 crore.

  • The Swachh Bharat cess has been levied only on the portion of taxable services (after abatement) and will go towards funding of the cleanliness drive, a pet project of Prime Minister Narendra Modi.

  • The service tax on restaurant bills will go up from 5.6 per cent to 5.8 per cent following the levy of 0.5 per cent Swachh Bharat cess.

  • The Swachh Bharat cess will not apply on those services for which payments have been received prior to November 15 and invoices raised before November 29.

  • The decision to impose 0.5 per cent cess will translate into a tax of 50 paise only on every Rs. 100 worth of taxable services.

  • Finance Minister Arun Jaitely had in Budget 2015-16 proposed to levy a Swachh Bharat cess of up to 2 per cent on all or certain services, if need arises.

Swachh Bharat cess is not another tax but a step towards involving each and every citizen in making contribution to Swachh Bharat. The proceeds from this cess will be exclusively used for Swachh Bharat initiatives.

The government had in Budget 2015-16 estimated to collect over Rs. 2.09 lakh crore from service tax. The Rs. 3800 crore collection from the cess would be over and above that.


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