Swachh Bharat Cess 0.5 %

Swachh-BharatSwachh Bharat Cess will be effective from November 15, at the rate of 0.5% on all services, which are liable to service tax. This will translate into a tax of 50 paisa only on every Rs 100 worth of taxable
services. Proceeds will be used for promoting Swachh Bharat. Dubts were raised about the levy. For example, cess on services provided in serving food or beverages by a restaurant, eating joint or a mess, having the facility of air–conditioning or central air-heating would be 0.5% of 40% i.e 0.2%. The cumulative service tax and Swachh Bharat Cess liability would be 5.8% (14.5% of 40%) of the total amount charged. Service tax is levied at lternative rates on service provided by air travel agents, life insurance service, service in relation to sale/purchase of foreign exchange including money changing and service by lottery distributors/selling agents, subject to fulfilment of conditions prescribed under the Service Tax Rules.
Option has been provided for levy of Swachh Bharat Cess also at alternative rates in respect of the above mentioned services. The alternate rate of Swachh Bharat Cess would be: Service Tax Liability (at the alternate rate) X 0.5/14.

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