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Diwali Bonus “Swachh Bharat Cess”

Service Tax - By: - Monarch Bhatt - Dated:- 9-11-2015 Last Replied Date:- 10-11-2015 - In Finance Act, 2015 new chapter VI has been added for introduction of levy and collection of Swachh Bharat Cess (SBC). Now on 06th November 2015, Notification 21/2015-Service Tax has been issued to notify the date for imposition of SBC as 15th November 2015. Therefore, new levy of SBC will be leviable on services from 15th November 2015. 1.Services liable for the payment of SBC & its percentage As per sub .....

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f financing and promoting Swachh Bharat initiatives or for any other purpose relating thereto. Board has issued another notification 22/2015-Service Tax dated 06th November 2015 to clarify this aspect. As per the notification SBC is leviable on all the taxable services at the rate of 0.5% on the value of taxable services. Therefore, as per the section instead of 2% on the value of services, it will be applicable at the rate of 0.5% on the value of services as 1.5% exemption has been given to all .....

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t of SBC The notification further clarifies that SBC will not be leviable on some of the services for which the relevant proviso of the notification reads as under. 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. As per the proviso SBC is not leviable on the value of services .....

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nsulates or foreign diplomatic agents or to their family members as per notification number 27/2012-Service Tax, are not liable for the payment of SBC as service tax is not leviable on it under section 66B. The service provider availing the benefit of exemption granted under notification number 33/2012-Service Tax and not paying service tax upto the value of ₹ 10 lac as small service providers are not liable for the payment of SBC. The service providers availing the benefit of abatement no .....

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tion 66B. 3.CENVAT credit of SBC As per sub section (5) of section 119 the provisions of service tax shall apply for the SBC only with respect to the levy and collection. The relevant sub section (5) of the section 119 reads as under. (5) The provisions of Chapter V of the Finance Act, 1994 and the rules made thereunder, including those relating to refunds and exemptions from tax, interest and imposition of penalty shall, as far as may be, apply in relation to the levy and collection of the Swac .....

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e cenvat credit of SBC. Therefore, cenvat credit of SBC is not allowed. 4.Applicability of Point of Taxation Rules, 2011 The Point of Taxation Rules, 2011 (POT) are formed for the collection of service tax and as per sub section (5) of section 119 all the provisions relating to the collection of service tax are equally applicable to SBC also. Therefore, Point of Taxation Rules, 2011 are applicable for collection of SBC also. It is to be noted that SBC is new levy and cannot be considered as chan .....

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.1 Advances received prior to 15/11/2015 invoice and service to be provided after 15/11/15. SBC is not chargeable as POT is date of receipt of advances and prior to 15/11/2015 SBC was not leviable. a.2 Advances received after 15/11/2015 invoice and service to be provided after 15/11/15. SBC is chargeable. b) POT RULE 3 - Invoice issued on or after 15/11/15 (for provider of service) b.1 Invoice for the services provided prior to 15/11/2015 has been issued on or after 15/11/15. SBC is chargeable. .....

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/2015 but invoice has not been issued within 30 days from the completion of service. (Other than banking company or a financial institution including a non-banking financial company and other than the cases continuous supply of service) SBC is not chargeable as POT in such cases shall be the date of completion of the provision of service which is prior to the levy of SBC. c.2 The taxable service has been completed on or before 14/11/2015 but invoice has not been issued within 45 days from the co .....

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reement has been completed on or before 14/11/2015 but invoice has not been issued within 30 days from the completion of service. SBC is not chargeable as POT in such cases shall be the date of completion of the provision of service which is prior to the levy of SBC. d) POT RULE 7 - Payment made on or after 15/11/15 (For receiver of service) d.1 Invoices received prior to 15/11/2015 and payment made on or after 15/11/2015 where service tax is payable by receiver of service under reverse charge m .....

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Supply Service, Legal Service, security service, works contract service, import of services, etc. SBC is chargeable as deemed date for POT is next date from the 3 months from invoice date. f) POT RULE 7 - Liability in case of transaction with Associated Enterprises (For receiver of service) f.1 Invoices received are dated prior to 15/11/2015 and payment not made upto 15/11/2015 but debited in the books of accounts prior to 15/11/2015 where service tax is payable as receiver of service for trans .....

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wachh Bharat Cess 1 Service in relation to financial leasing including hire purchase 14% on 10% of service value 0.5% on 10% of service value 2 Transport of goods by rail 14% on 30% of service value 0.5% on 30% of service value 3 Transport of passengers, with or without accompanied belongings by rail 14% on 30% of service value 0.5% on 30% of service value 4 Bundled service by way of supply of food or any other article of human consumption or any drink, in a premises (including hotel, convention .....

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mmercial place meant for residential or lodging purposes 14% on 60% of service value 0.5% on 60% of service value 7 Services of goods transport agency in relation to transportation of goods 14% on 30% of service value 0.5% on 30% of service value 8 Renting of motor cab 14% on 40% of service value 0.5% on 40% of service value 9 Transport of Passengers, with or without accompanied belongings, by a contract carriage other than motor cab a radio taxi 14% on 40% of service value 0.5% on 40% of servic .....

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% of service value 12 Construction of complex, building, civil, structure, or a part thereof, intended for a sale to a buyer, wholly or partly, except where entire consideration is received after issuance of completion certificate by competent authority,- for a residential unit satisfying both the following conditions, namely:- The carpet area of the unit is less than 2000 square feet; And (ii) The amount charges for the unit is less than rupees one crore; 14% on 25% of service value 0.5% on 25% .....

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ersons to a business entity registered as body corporate, by way of : maintenance or repairs or reconditioning or restoration or servicing of any goods or maintenance or repair or completion and finishing services like glazing or plastering or wall and tilling or installation of electrical fittings of immovable property service tax payable by provider of service service tax payable by recipient of service 14% on 20% of service value 14% on 20% of service value 14% on 35% of service value 14% on .....

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roperty 14% on 40% of service value 14% on 70% of service value 0.5% on 40% of service value 0.5% on 70% of service value 15 Renting of motor vehicle designed to carry passengers (not engaged in similar line of service) covered under reverse charge mechanism where services provided by Individual or HUF or partnership firm or association of persons to a business entity registered as body corporate, service tax shall be payable on abated value, by service provider by service receiver b)on non abat .....

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on 60% of total value charged 0.5% on 60% of total value charged 6.Notification expected for SBC Accounting Code & SBC on Foreign Currency Exchange The service provider providing the currency exchange service and paying slab wise service tax as per sub rule (7B) of rule 6 is also liable to discharge the SBC on or after 15/11/2015. It is to be noted that to discharge the service tax under this sub rule no provision has been provided to determine the value of service. It is fixed amount and pe .....

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