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Swachh Bharat Cess Can it be collected without levy ?

Service Tax - By: - Monarch Bhatt - Dated:- 22-1-2016 Last Replied Date:- 17-3-2016 - The Swachh Bharat Cess (SBC) has been introduced with effect from 15th November, 2015 on all the taxable services. The board has also issued Frequently Asked Questions (FAQ) to clarify the various aspects in relation to the applicability, valuation, levy and collection of SBC. The many of the clarifications given in the FAQ are such that one cannot understand whether it is clarifying or it is making it more com .....

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SBC for the first time. SBC, therefore, is a new levy, which was not in existence earlier. Hence, rule 5 of the Point of Taxation Rules would be applicable in this case. Therefore, in cases where payment has been received and invoice is raised before the service becomes taxable, i.e. prior to 15th November, 2015, there is no lability of Swachh Bharat Cess. In cases where payment has been received before the service became taxable and invoice is raised within 14 days, i.e. upto 29th November, 20 .....

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etermined in case of reverse charge services where services have been received prior to 15.11.2015 but consideration paid post 15.11.2015? Ans. In respect of reverse charge mechanism, SBC liability is determined in accordance with Rule 7 of Point of Taxation Rules, as per which, point of taxation is the date on which consideration is paid to the service provider. Thus, SBC liability in such case will be 0.5% X Value of taxable service. In view of the above clarifications given in the FAQ, SBC is .....

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ing of tax or imposition of tax. Collect means the physical realisation of tax which is levied or charged. The levy and collection are distinctly different from each other and exigibility to tax is not the same as liability to pay tax; that the former depends on charge created by the statute and later on computation in accordance with the provisions of statute and rules made thereunder. The collection of tax is always at subsequent stage then levy. The point of collection does not affect the lev .....

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e tax only when it is provided or agreed to be provided . The term agreed to be provided has also been clarified in the Service Tax Education Guide issued at the time introduction of negative list of services wherein it states that receipt of advances for services agreed to be provided become taxable before the actual provision of service. Therefore, the phrase agreed to be provided to be considered as the moment when assessee receives advances. Hence, rendition of service or the receipt of adva .....

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there is no levy you can not apply the rules for the collection of taxes. Therefore before determining the SBC liability, one must determine whether at the time of rendering of service or at the time of receipt of advances SBC was leviable or not. If SBC was not leviable at the time of levy, based on the POT it cannot be collected. Hence, in my view the clarification given in the FAQ is not correct (with respect to the underlined clarification) as it applies the rules for the collection of taxe .....

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thin 14 days i.e. upto 29.11.15 No No Prior to 15.11.15 Prior to 15.11.15 After 14 days from 15.11.15 i.e. after 29.11.15 No No Prior to 15.11.15 On/after 15.11.15 On/after 15.11.15 but within 14 days i.e. upto 29.11.15 No No Prior to 15.11.15 On/after 15.11.15 After 14 days from 15.11.15 i.e. after 29.11.15 No No On/after 15.11.15 Prior to 15.11.15 On/after 15.11.15 but within 14 days i.e. upto 29.11.15 No No On/after 15.11.15 Prior to 15.11.15 After 14 days from 15.11.15 i.e. after 29.11.15 No .....

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