Background:
Chapter VI (Section 119) of the Finance Act 2015 contains
provisions for levy and collection of Swachh Bharat
Cess (SBC). Now the Government has announced 15th November,
2015 as the date from which the provisions of Section 119 would come into
effect (notification No.21/2015-Service Tax, dated 6th November,
2015 refers). Simultaneously, Government has also notified levy
of Swachh Bharat Cess at the rate of 0.5% on all taxable services. Effectively,
the rate of SBC would be 0.5% and new rate of service tax plus SBC would be
14.5%. As such SBC translates into a tax of 50 paisa only on every one hundred
rupees worth of taxable services. The proceeds from this cess will be
exclusively used for Swachh Bharat initiatives.
In this context, the relevant Chapter of the Finance Act, 2015
is reproduced below:-
“CHAPTER VI
SWACHH BHARAT CESS
119 (1) This Chapter shall come into force on such date as the
Central Government may, by notification in the Official Gazette, appoint.
(2) There shall be levied and collected in accordance with the
provisions of this Chapter, a cess to be called the Swachh Bharat Cess, as
service tax on all or any of the taxable services at the rate of two per
cent. on the value of such services for the purposes of financing and promoting
Swachh Bharat initiatives or for any other purpose relating thereto.
(3) The Swachh Bharat Cess leviable under sub-section (2) shall
be in addition to any cess or service tax leviable on such taxable services
under Chapter V of the Finance Act, 1994, or under any other law for the time
being in force.
(4)The proceeds of the Swachh Bharat Cess levied under
sub-section (2) shall first be credited to the Consolidated Fund of India
and the Central Government may, after due appropriation made by Parliament
by law in this behalf, utilise such sums of money of the Swachh Bharat Cess for
such purposes specified in sub-section (2), as it may consider necessary.
(5) The provisions of Chapter V of the Finance Act, 1994 and the
rules made thereunder, including those relating to refunds and exemptions
from tax, interest and imposition of penalty shall, as far as may be,
apply in relation to the levy and collection of the Swachh Bharat Cess on taxable
services, as they apply in relation to the levy and collection of tax on such
taxable services under Chapter V of the Finance Act, 1994 or the rules
made thereunder, as the case may be.´
On this issue, Hon’ble FM in his speech for Budget 2015-16 has
stated as under:-
“10. The third is ‘Swachh Bharat’ which we have been able to
transform into a movement to regenerate India. I can speak of, for example, the
50 lakh toilets already constructed in 201 4-1 5, and I can also assure
the Members of this august House that we will indeed attain the target of
building six crore toilets. But, Madam, Swachh Bharat is not only a
programme of hygiene and cleanliness but, at a deeper level, a programme for preventive
health care, and building awareness.”
“123. —-It is also
proposed to have an enabling provision to levy Swachh Bharat Cess at a rate of
2% or less on all or certain services if need arises. This Cess will be
effective from a date to be notified. Resources generated from this cess
will be utilised for financing and promoting initiatives towards Swachh
Bharat.´
No comments:
Post a Comment