Sbc service tax

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

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

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.

FAQ on Swach Bharat Cess

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%

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

 

agree with above entry is right

Thanks & regards

Ramanuj

 

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.