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Are you a person with a degree in Engineering or social work or environmental sciences? Are you a person willing to work as Project Coordinator or Team Coordinator then log onto www.wisdomjobs.com. Swachh Bharat Cess (SBC) is levy/ tax imposed by the Union Government on all service tax, for raising funds for the sanitation campaign of the Government known as SwachhBharat. The CESS got imposed with effect from 15th November 2013 at the rate of 0.5%. This translates into a tax of 50 paisa on every one hundred rupees worth of taxable services. With introduction of KrishiKalyan Cess at 0.5 June 1, 2016 effective rate of services tax would eventually rate of service tax which was earlier increased to 14%. So place yourself as Project Officer, Project Coordinator, City Project Officer by looking into Swach Bharat Cess job interview question and answers given.
It is a Cess which shall be levied and collected in accordance with the provisions of Chapter VI of 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.
The Central Government has appointed 15th day of November, 2015 as the date from which provisions of Swachh Bharat Cess will come into effect (notification No.21/2015-Service Tax, dated 6th November, 2015 refers).
Swachh Bharat Cess is not leviable on services which are fully exempt from service tax or those covered under the negative list of services.
SBC has been imposed for the purposes of financing and promoting Swachh Bharat initiatives or for any other purpose relating thereto.
Proceeds of the SBC will be credited to the Consolidated Fund of India, and the Central Government may, after due appropriation made by Parliament, utilise such sums of money of the 3 SBC for the purposes of financing and promoting Swachh Bharat initiatives or for any other purpose relating thereto.
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.
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 which would be notified shortly.SBC may be charged separately after service tax as a different line item in invoice. It can be accounted and treated similarly to Education cesses.
Effective rate of service tax plus SBC, post introduction of SBC, would be [14% + 0.5%].
No, SBC is not a cess on Service Tax. SBC shall be levied @ 0.5% on the value of taxable services.
The Central Government was empowered to impose SBC either on all or some of the taxable services. Vide notification No 22/2015-ST dated 6-11-2015, Government has notified 4 that SBC shall be applicable on all taxable services except services which are either fully exempt from service tax under any notification issued under section 93(1) of the Finance Act, 1994 or are otherwise not leviable to service tax under section 66B of the Finance Act, 1994.
In case of reverse charge under section 68(2) of the Finance Act, 1994, the liability has been shifted from service provider to the service recipient. As per section 119 (5) of the Finance Act, 2015, the provisions of Chapter V of the Finance Act, 1994, and the rules made thereunder are applicable to SBC also. Thus, the reverse charge under section 68(2) of the Finance Act, 1994, is made applicable to SBC. In this context, to clarify, Government has issued notification No. 24/2015-Service Tax dated 12th November, 2015 to provide that reverse charge under notification No.30/2012-Service Tax dated 20th June, 2012 shall be applicable for the purpose of levy of Swachh Bharat Cess mutatis mutandis.
Taxable services, on which service tax is leviable on a certain percentage of value of taxable service, will attract SBC on the same percentage of value as provided in the notification No. 26/2012-Service Tax, dated 20th June, 2012. So, this notification would apply for SBC also in the same manner as it applies for service tax.
in the case of GTA, [Service Tax + SBC]% would be (14% Service Tax + 0.5%SBC) X 30% = 4.35% (4.20%+0.15%)
SBC is not integrated in the Cenvat Credit Chain. Therefore, credit of SBC cannot be availed. Further, SBC cannot be paid by utilizing credit of any other duty or tax.
As regards Point of Taxation, since this levy has come for the first time, all services (except those services which are in the Negative List or are wholly exempt from service tax) are being subjected to 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, 2015, even then the service tax liability does not arise. SwachhBharat Cess 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. Swachh Bharat Cess 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 notissued by 29th Nov, 2015.
The tax (Service Tax and SBC) on services covered by Rule 2A, 2B or 2C of Service Tax(Determination of Value) Rules, 2006, would be computed by multiplying the value determined in accordance with these respective rules with [14% + 0.5%]. Therefore, effective rate of Service Tax plus SBC in case of original works and other than original works under the works contract service would be 5.8% [(14% + 0.5%)*40%] and 10.15% [(14% + 0.5%)*70%] respectively.Similar, would be the tax treatment for restaurant and outdoor catering services.
Swachh Bharat Cess would be calculated on the value arrived at in accordance with the Service Tax (Determination of Value) Rules, 2006. For example, the effective Swachh Bharat Cess in respect of services provided in relation to serving of food or beverages by a restaurant, eating joint or a mess, having the facility of air–conditioning or central air-heating in any part of the establishment, would be 0.5% of 40% of the total amount, i.e, 0.2% of the total amount. The cumulative service tax and Swachh Bharat Cess liability would be [14% ST + 0.5% SBC] of 40% of the total amount, i.e., 5.8% of the total amount charged.
Question 17. Whether Sbc Would Be Applicable On Services Covered By Rule 6 Of Service Tax Rules (i.e. Air Travel Agent, Life Insurance Premium, Purchase And Sale Of Foreign Currency And Services By Lottery Distributors/selling Agents)?
Sub-rule (7D) to rule 6 has been inserted vide notification 25/2015-Service Tax, dated 12th November, 2015 so as to provide that the person liable for paying the service tax under sub-rule (7), (7A), (7B) or (7C) of rule 6 of Service Tax Rules, shall have the option to pay SBC as determined as per the following formula:-Service Tax liability [calculated as per sub-rule (7), (7A), (7B) or (7C)] X 0.5%/14% The option under this sub-rule once exercised, shall apply uniformly in respect of such services and shall not be changed during a financial year under any circumstances.
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.
Question 19. Does A Person Providing Both Exempted And Taxable Service And Reversing Credit @ 7% Of Value Of Exempted Service Under Rule 6 Of Cenvat Credit Rules, Does He Need To Reverse The Sbc Also?
As SBC is not integrated in the Cenvat Credit chain and reversal under Rule 6 is payment of amount equal to 7% of the value of exempted services, hence, reversal of SBC is not required under Rule 6 of Cenvat Credit Rules, 2004.
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