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Whether the Levy of Swachh Bharat Cess is challengeable? Yes, it seems to be...

Service Tax - By: - Manoj Agarwal - Dated:- 19-11-2015 - To finance and promote Swachh Bharat initiatives, an enabling provision was incorporated in the Finance Act, 2015 (hereinafter referred as the Act) vide Chapter VI to empower the Central Government to impose a Swachh Bharat Cess (hereinafter referred as SBC) on all or any of the taxable services at a rate of 2% on the value of such taxable services. Sub-section (2) of Section 119 of the Finance Act, 2015 which is the charging section, is r .....

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cation services, works contract services, hotel services, etc. Since the Central Government was not sure whether it should levy the tax on all taxable services or on few selective services, they used the phrase, all or any and enabled itself to keep any service outside the scope of charging section!! With due respect, the author is of the view that the words or any has been used unnecessarily in the charging section, as it leads to vagueness and uncertainty to the subject of the levy. The chargi .....

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ingly, without specifying the taxable services subjected to the levy, the government has issued Notification No. 22/2015-ST dated 06-11-2015 exempting the following service from payment of SBC: Services covered under Negative List u/s 66D Services exempt from service tax under any notification issued u/s 93(1) of the Finance Act, 1994 Applying strict literal interpretation as applicable in case of taxing statutes, one can challenge the levy of SBC from 15-11-2015 because the Central Government h .....

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ithin the four corners of the LEVY of SBC. It has not issued any notification to LEVY SBC on ALL taxable services!!! Nothing can be assumed in law. Some important rulings of the apex court are extracted below to highlight the importance of charging section and the words used therein in case of levy of tax. The Hon ble Supreme Court in the case of Mathuram Agrawal v. State of Madhya Pradesh [1999 (10) TMI 125 - Supreme Court of India] observed: The statute should clearly and unambiguously convey .....

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