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Sbc service tax

vasudev (asst.manager ) (26 Points)

08 December 2015

Sir

SBC code allotted under Ed.cess and SHE.cess. But .5 % of tax amount charged on Basic invoice instead of Service tax amount. Is it correct. please suggest me for accounting purpose.

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8 Replies

Niraj Kumar Sinha (Sr. Officer, SPSIL) (648 Points)
Replied 08 December 2015

.5% will be charged on same value on which service tax has been charged.

Ashwani Narnoli (.) (1843 Points)
Replied 08 December 2015

Actually it is a tax in the name of cess and not a cess. Thats why it is calculated on the vale of taxable service instead of service tas as was in the case of ec and shec

Raghuveer (Executive) (167 Points)
Replied 08 December 2015

Yes, it is correct. Swachh Bharat Cess (SBC) is a levy on the value of taxable services and not on the service tax thereon. The effective rate of tax thus becomes 14.50% of the value of taxable service. SBC unlike service tax is not available via Cenvat Credit and should therefore be expensed off while accounting. For more clarity refer the FAQ on SBC in the CBEC website.

CMA. CS. Sanjay Gupta ("PROUD TO BE AN INDIAN") (114230 Points)
Replied 09 December 2015

FAQ on Swach Bharat Cess

CA YOGESH HARJAI (Tax Advisor) (127 Points)
Replied 09 December 2015

Swachh Bharat Cess (SBC) is levied on the value of Taxable Services and not on value of service tax. Effective rate of Service Tax is now 14.5%

Madhukar N Hiregange (Chartered Accountant) (39039 Points)
Replied 09 December 2015

SBC Accounting entries suggested:

When charged by SP

XYZ Cusotmer 114.50

To Services ( Telehone) 100

To S tax 14

To SBC 0.50

When accounted by service reciver if availing credit

Advertisement 100.50

S Tax recoverable 14

To ABC SP 114.50

Ramanuj (Accountant.) (834 Points)
Replied 09 December 2015

agree with above entry is right

Thanks & regards

Ramanuj

Prashant Soni (F&A Executive) (23 Points)
Replied 09 December 2015

In notification It is clearly stated that it is not a cess. You can consider it is a additional tax which is charged on taxable amount only. It is also non set off means you can not avail credit of the same. Provision of exemption is only on some export oriented services.