CA Vinay Lunkad S
♠ Swach Bharath Cess (SBC) to be levied @ 2% on all or any taxable services on the VALUE of such services as per S-119 of the Finance Act 2015 w.e.f 15th Nov 2015 as per Notification No.21 dated 6th Nov 2015. However Notification No.22/2015 Dated 6th Nov 2015 of service Tax exempts Swach Bharat Cess in excess of 0.50% of the value of taxable services.
♠ Value on Which Swachh Bharth Cess is applicable or needs to be computed?
For ex; For a hotel for room rent service following 2 alternatives are possible for service Tax Computations and SBC:-
|Particulars||Alternative 1||Alternative 2|
|Less:Abatement @ 40%||6,00,000||6,00,000|
|Abated Value (B)||9,00,000||9,00,000|
|Add:ServiceTax on above @ 14%||1,26,000||1,26,000|
|Add:SBC @ .5%||4,500||7,500|
|(On B)||(On A)|
Alternative 1:- As per S-119(2) of Finance Act 2015 SBC will be levied on Value of services and not the taxable value
Alternative 2:-As per S-119(2) of Finance Act 2015 though the wordings used are value of services but applying the principle of ejusdem Generis (Interpretation of Statutes – specific expressions) wherein value of services shall mean value of taxable services.
A clarification in this regard is expected from the Finance Ministry.
♠ As per Cenvat credit Rules 2004 , Rule 3 no CENVAT Credit can be claimed as SBC is levied under S-119 of the Finance Act 2015 and not S-66 of the Finance Act
♠ As per S-119(5) of Finance Act 2015 for the purposes of Levy and collection all the provisions of Chapter V of Finance Act 1994 and rule thereunder including refunds, exemptions from tax interest and penalty shall apply whereby Point of Taxation Rules 2011 for the purpose of levy and collection will apply and the in case of delay in payment of service tax interest and penalty provisions will be levied accordingly.
♠ In case of continuous supply of services as per point of Taxation Rules 2011 SBC will be charged on all bills raised post 15th Nov 2015
♠ Unlike Cess which is usually charged on Tax amount SBC is charged on Value of services and not Tax.