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Swachh Bharat Cess tax 0.5

Swachh Bharat Cess tax 0.5


The Finance Act, 2015 had proposed the following amendments in relation to the rate of service tax –

1. Increase in service tax rate from 12.36% to 14.%.

2. Levy of Swachh Bharat Cess

These rates were to be levied from the dates notifies by the Central Government. The increase in service tax rate from 12.36% to 14% was implemented from 1st June, 2015 vide Notification No 14/ 2015 – Service Tax dated May 19, 2015.

Notification date of Swachh Bharat Cess –

The Central Government has vide Notification No 22/2015 dated 6th November 2015 notified that Swachh Bharat Cess will be leviable  on taxable value of all services @ 0.5%.  This cess will be leviable from 15th November 2015. Therefore, with effect from 15th November 2015, the effective rate of service tax will be 14.5%.

This cess is being levied by the Central Government to boost the Swachh Bharat programme and to fund various activities carried out for such programme.

It has to be noted that Swachh Bharat Cess will be leviable on value of taxable services unlike the earlier cess i.e., Educational Cess and Secondary  Higher Education Cess which were leviable on Service Tax.

The relevant notification is reproduced below –

Notification No. 22/2015-Service Tax

G.S.R. —(E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) read with sub-section (5) of section 119 of the Finance Act, 2015 (20 of 2015), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts all taxable services from payment of such amount of the Swachh Bharat Cess leviable under sub-section (2) of section 119 of the said Act, which is in excess of Swachh Bharat Cess calculated at the rate of 0.5 percent. of the value of taxable services:

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.

This notification shall come into force from the 15th day of November, 2015.

 [F.No. 354/129/2015 – TRU]

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