the government of india has announced a swachh bharat cess

8/18/2019 The Government of India Has Announced a Swachh Bharat Cess

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The Government of India has announced a Swachh Bharat Cess (SBC) of 0.5% on all taxaleThe Government of India has announced a Swachh Bharat Cess (SBC) of 0.5% on all taxale

services that is to e levied and collected with effect from !5 "ovemer #0!5. Theservices that is to e levied and collected with effect from !5 "ovemer #0!5. The

notification to this effect was released $ the Government on "ovemer #0!5 videnotification to this effect was released $ the Government on "ovemer #0!5 vide

"otification "o #!!5'Service Tax coverin Swachh Bharat Cess under Cha*ter +I "otification "o #!!5'Service Tax coverin Swachh Bharat Cess under Cha*ter +I

(Section !!,) of the -inance ct #0!5.(Section !!,) of the -inance ct #0!5.

IIMPACTMPACT--

The SBC of 0.5% will e *aid $ all citi/ens who avail of an$ service that is taxale under The SBC of 0.5% will e *aid $ all citi/ens who avail of an$ service that is taxale under

service tax. hat this means is that for ever$ 1s !00 s*ent in availin an$ taxale service 1sservice tax. hat this means is that for ever$ 1s !00 s*ent in availin an$ taxale service 1s

0.50 will e *aid to the overnment as SBC. This will a**l$ to services li2e a&c restaurants0.50 will e *aid to the overnment as SBC. This will a**l$ to services li2e a&c restaurants

rail road and air services lotter$ services insurance *remiums and the li2e which means allrail road and air services lotter$ services insurance *remiums and the li2e which means all

those availin such services will now have to *a$ an extra 0.5%. 3owever the SBC will notthose availin such services will now have to *a$ an extra 0.5%. 3owever the SBC will not

e levied on services listed under the neative list or those that have een exem*t from e levied on services listed under the neative list or those that have een exem*t from

service tax.service tax.

-irstl$ it must e clarified that while the SBC is referred to as a cess it is actuall$ a service-irstl$ it must e clarified that while the SBC is referred to as a cess it is actuall$ a service

tax. SBC is not a**licale on the amount of service tax ut on the value of taxale services.tax. SBC is not a**licale on the amount of service tax ut on the value of taxale services.

ll service *roviders will now have to chare the SBC as a se*arate and clear amount andll service *roviders will now have to chare the SBC as a se*arate and clear amount and

this will in turn e reistered in the service *rovider4s accounts under a se*arate headin andthis will in turn e reistered in the service *rovider4s accounts under a se*arate headin and *aid to the overnment under the s*ecified accountin code as *er notification from the *aid to the overnment under the s*ecified accountin code as *er notification from the

overnment.overnment.

The existin service tax is !% (raised recentl$ from !#.5% to !%) and the SBC will eThe existin service tax is !% (raised recentl$ from !#.5% to !%) and the SBC will e

chared additionall$ at 0.5% therefore ma2in the total service tax stand at !.5%.chared additionall$ at 0.5% therefore ma2in the total service tax stand at !.5%.

ll SBC collected will e credited to the Consolidated -und of India account and will ell SBC collected will e credited to the Consolidated -und of India account and will e

utili/ed $ the Government of India for *ur*oses of im*lementin the Swachh Bharatutili/ed $ the Government of India for *ur*oses of im*lementin the Swachh Bharat

hi$an.hi$an.

Why has the government introduced the Swachh Bharat Cess?Why has the government introduced the Swachh Bharat Cess?

The SBC is aimed at raisin additional funds to effectivel$ im*lement stated oals under theThe SBC is aimed at raisin additional funds to effectivel$ im*lement stated oals under the

Swachh Bharat hi$an. hen 6rime 7inister 7odi too2 office in 7a$ #0! he ado*ted theSwachh Bharat hi$an. hen 6rime 7inister 7odi too2 office in 7a$ #0! he ado*ted the

Swachh Bharat hi$an as one of the *rimar$ oals of his overnment that was aimed atSwachh Bharat hi$an as one of the *rimar$ oals of his overnment that was aimed at

im*rovin the overall health and well'ein of citi/ens. The mission was formall$ launchedim*rovin the overall health and well'ein of citi/ens. The mission was formall$ launched

on # 8ctoer #0!.on # 8ctoer #0!.


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3ealth and h$iene directl$ im*acts *eo*le4s lives ut have een iven ver$ little attention3ealth and h$iene directl$ im*acts *eo*le4s lives ut have een iven ver$ little attention

towards im*rovin *ersonal h$iene and cleanliness in the surroundins that *eo*le live in.towards im*rovin *ersonal h$iene and cleanliness in the surroundins that *eo*le live in.

The 6rime 7inister started an awareness on the need to maintain cleanliness and ive u*The 6rime 7inister started an awareness on the need to maintain cleanliness and ive u*

o*en air defecation that has een a common *ractice in India on account of lac2 of toilets ino*en air defecation that has een a common *ractice in India on account of lac2 of toilets in

*eo*le4s homes. *eo*le4s homes.

This was ta2en u* on mission mode and ac2ed with an actionale *lan to ensure that IndiaThis was ta2en u* on mission mode and ac2ed with an actionale *lan to ensure that India

uilt !# crore toilets in rural and uran areas and ensure that India ecame free from o*en air uilt !# crore toilets in rural and uran areas and ensure that India ecame free from o*en air

defecation $ #0!,. The Swachh Bharat hi$an has the followin oals9defecation $ #0!,. The Swachh Bharat hi$an has the followin oals9

Totall$ eliminate o*en air defecation.Totall$ eliminate o*en air defecation.

Build *it latrines in all homes of those livin elow *overt$ line with :0% cost susid$.Build *it latrines in all homes of those livin elow *overt$ line with :0% cost susid$.

Total eradication of manual scavenin.Total eradication of manual scavenin.

1ec$clin and *rocessin of solid waste into ener$ and other $'*roducts li2e fertili/er.1ec$clin and *rocessin of solid waste into ener$ and other $'*roducts li2e fertili/er.

Im*rove *eo*le4s awareness for *ro*er sanitation and on the im*ortance of *ersonal h$iene.Im*rove *eo*le4s awareness for *ro*er sanitation and on the im*ortance of *ersonal h$iene.

Involve *eo*le with the hel* of *rivate sector and various "G8s to s*read the need to *ro'Involve *eo*le with the hel* of *rivate sector and various "G8s to s*read the need to *ro'

activel$ ado*t and *romote the oals of the hi$an.activel$ ado*t and *romote the oals of the hi$an.

To ensure that Swachh Bharat hi$an is ale to meet its stated oals the overnment hasTo ensure that Swachh Bharat hi$an is ale to meet its stated oals the overnment has

decided to introduce the Swachh Bharat Cess for raisin funds to meet mission o;ectives.decided to introduce the Swachh Bharat Cess for raisin funds to meet mission o;ectives.

) The Swachh Bharat Cess leviale under su'section (#) shall e in addition to an$The Swachh Bharat Cess leviale under su'section (#) shall e in addition to an$

cess or service tax leviale on such taxale services under Cha*ter + of the -inancecess or service tax leviale on such taxale services under Cha*ter + of the -inance

ct !,, or under an$ other law for the time ein in force.ct !,, or under an$ other law for the time ein in force.

()() The *roceeds of the Swachh Bharat Cess levied under su'section (#) shall first eThe *roceeds of the Swachh Bharat Cess levied under su'section (#) shall first ecredited to the Consolidated -und of India and the Central Government ma$ after duecredited to the Consolidated -und of India and the Central Government ma$ after due


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a**ro*riation made $ 6arliament $ law in this ehalf utilise such sums of mone$ of a**ro*riation made $ 6arliament $ law in this ehalf utilise such sums of mone$ of

the Swachh Bharat Cess for such *ur*oses s*ecified in su'section (#) as it ma$the Swachh Bharat Cess for such *ur*oses s*ecified in su'section (#) as it ma$

consider necessar$.consider necessar$.

(5)(5) The *rovisions of Cha*ter + of the -inance ct !,, and the rules made thereunderThe *rovisions of Cha*ter + of the -inance ct !,, and the rules made thereunder

includin those relatin to refunds and exem*tions from tax interest and im*ositionincludin those relatin to refunds and exem*tions from tax interest and im*osition

of *enalt$ shall as far as ma$ e a**l$ in relation to the lev$ and collection of theof *enalt$ shall as far as ma$ e a**l$ in relation to the lev$ and collection of the

Swachh Bharat Cess on taxale services as the$ a**l$ in relation to the lev$ andSwachh Bharat Cess on taxale services as the$ a**l$ in relation to the lev$ and

collection of tax on such taxale services under Cha*ter + of the -inance ct !,, or collection of tax on such taxale services under Cha*ter + of the -inance ct !,, or

the rules made thereunder as the case ma$ e.the rules made thereunder as the case ma$ e.

?.! 3ow would the tax (Service Tax and SBC) e calculated on services covered?.! 3ow would the tax (Service Tax and SBC) e calculated on services covered

under 1ule # #B or #C of Service Tax (@etermination of +alue) 1ules #00.A ns.under 1ule # #B or #C of Service Tax (@etermination of +alue) 1ules #00.A ns.

The tax (Service Tax and SBC) on services covered $ 1ule # #B or #C of ServiceThe tax (Service Tax and SBC) on services covered $ 1ule # #B or #C of ServiceTax (@etermination of +alue) 1ules #00 would e com*uted $ multi*l$in theTax (@etermination of +alue) 1ules #00 would e com*uted $ multi*l$in the

value determined in accordance with these res*ective rules with !% 0.5%D.value determined in accordance with these res*ective rules with !% 0.5%D.

Therefore effective rate of Service Tax *lus SBC in case of oriinal wor2s and other Therefore effective rate of Service Tax *lus SBC in case of oriinal wor2s and other

than oriinal wor2s under the wor2s contract service would e 5.:% (!% than oriinal wor2s under the wor2s contract service would e 5.:% (!%

0.5%)E0%D and !0.!5% (!% 0.5%)EF0%D res*ectivel$. Similar would e the tax0.5%)E0%D and !0.!5% (!% 0.5%)EF0%D res*ectivel$. Similar would e the tax

treatment for restaurant and outdoor caterin services.treatment for restaurant and outdoor caterin services.

the government of india has announced a swachh bharat cess

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