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Service Tax Notification for Swachh Bharat Cess

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In Union Budget 2015, a provision was made for levying of SB Cess on all the services for the purpose of financing and promoting Swachh Bharat initiatives or for such other purpose.  However, the effective date of levy was not notified at that time. This has now been done, for which details are as under:

Notification Nos. – 21/2015-ST and 22/2015-ST, both dated November 6, 2015
Effective Date of SB Cess – November 15, 2015
Applicability – On all services except the exempted services or services falling under negative list
Rate –

  • 0.5% of the taxable services over and above the 14% current rate of service tax (i.e. net effective rate of service tax will now be 14.50% of the value of taxable services).
  • In case of restaurant services, the total service tax rate will now be 5.8% (i.e. 14.5% * 40%)

Additional Points –

  • This Cess needs to be separately charged on the invoice
  • Separate accounting will be notified for deposit of SB Cess
  • SB Cess is applicable only on services and not on manufacturing of goods
  • SB Cess is also applicable on services falling under reverse charge mechanism