Swatch bharat cess

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Nazneen (Querist)
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23 January 2016 IF
SBC OUTPUT -0.5% -2000
(-)SBC INPUT - 0.5% -1000 (CENVAT)
BALANCE PAYABLE - 1000
IS IT CORRECT ENETRY? LET ME KNOW.

Suresh Ramaswamy

Suresh Ramaswamy (Expert)
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24 January 2016 Swatch Bharat Cess is an additional levy @0.5 % on Services Rendered and / or Received. The same is payable only in Cash i.e through GAR - 7 Challan [e-payment through bank]. Further SBC is not CENVATable and hence no Input credit can be taken. In your illustration you are liable to pay the entire Rs.2,000/- and the SBC of Rs.1,000/- you have paid on services received for rendering output services should be charged directly as expenses to P & L Account.

Nazneen

Nazneen (Querist)
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29 January 2016 Thanks a lot Suresh sir for your quick reply

Nazneen

Nazneen (Querist)
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29 January 2016 Our company organizes an events at 5 star hotels. We sell sponsorships & booths. Sponsors under RCM & for booth net+14.5% S.T. collected. Could we avail the full cenvat credit of Food & Banquets & hall rental. Please let me know.
Suppose,
Service tax collected 1000 (14.5%)
(-) S.T.On F & Banq. 200 (9.80%)
(-) S.T. On Hall Rent 100 (14.5%)
Balance Payable ---- 700/-
It is correct. Please help me.

Suresh Ramaswamy

Suresh Ramaswamy (Expert)
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02 February 2016 In the case of food and banquet, the hotels levy service tax only on abated value of the bill i.e. on 70% of the total bill. An assessee can either avail of abatement or pay the full tax and claim CENVAT Credit. In your case for food and banquets you have enjoyed abatement of 30%. Hence the Input credit of Rs.200 cannot be availed. On the Hall Rent you can avail of the Input Credit. However Input Credit can be availed only on the ST portion of 14% and not on the 0.5% Swatch Bharat Cess. Therefore you can avail of input credit, in your example of just Rs.96/- and have to pay the balance tax pf Rs.904/-.

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