A Cess which shall be levied and collected in accordance with the Finance Act, 2015 called Swachh Bharat Cess, as service tax on all the taxable services at the rate of 0.5% of the value of taxable service. SBC is not a cess on Service Tax.

SBC would be calculated in the same way as Service tax is calculated. Therefore, SBC would be levied on the same taxable value as service tax.

 

Date of implementation of SBC

15th day of November, 2015 as the date from which provisions of Swachh Bharat Cess will come into effect.

It is not leviable on services which are fully exempt from service tax or those covered under the negative list of services.

SBC would be levied, charged, collected and paid to Government independent of service tax.

This needs to be charged separately on the invoice, accounted for separately in the books of account and paid separately under separate accounting code.

Besides that SBC may be charged separately after service tax as a different line item in invoice. It can be accounted and treated similarly to Education cess.

 

CENVAT Credit of the SBC is not available. SBC is not integrated in the Cenvat Credit chain.

 

SBC will be calculated on abated value.

 

The reverse charge mechanism is made applicable to SBC.

 

Swachh Bharat Cess
(Minor Head)		 Tax Collection Other Receipts
(Interest)		 Penalties Deduct Refunds
0044-00-506 00441493 00441494 00441496 00441495

 

NO SBC:

  • In cases where payment has been received and invoice is raised beforethe 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, 2015, even then the service tax liability does not arise.

 

SBC Apply:

  • SBC will be payable on services which are provided on or after 15th Nov, 2015, invoice in respect of which is issued on or after that date and payment is also received on or after that date.
  • SBC will also be payable where service is provided on or after 15th Nov, 2015 but payment is received prior to that date and invoice in respect of such service is not issued by 29th Nov, 2015.