INCREASE IN SERVICE TAX @ 14.50% wef 15.11.2015

INDIRECT TAXES UPDATE - 144

SERVICE TAX Swachh Bharat Cess leviable from 15th November 2015 CBEC vide Notification No. 21/2015-Service Tax Dated 6th November, 2015 has provided that Swachh Bharat Cess (SBC) @ 0.5% would be leviable on value of all taxable services with effect from 15th November 2015. This implies that effective rate of service tax will be 14.5%. Further, CBEC vide Notification No. 22/2015-Service Tax Dated 6th November, 2015 has exempted all taxable services from payment of Swachh Bharat Cess in excess of 0.5% of the value of services. It has also been provided that SBC would not be applicable on non-taxable services and services which are exempt from service tax. As there is no amendment proposed in the CENVAT Credit Rules, 2004, hence whether CENVAT credit of SBC would be available or not requires an immediate clarification/amendment from the board. [Notification No. 21/2015-Service Tax Dated 6th November, 2015 & Notification No. 22/2015-Service Tax Dated 6th November, 2015] Source: www.cbec.gov.in