Swachh Bharat cess of 0.5 % on all services
All services, including air travel, telephony, eating out and banking will become expensive from November 15,2015 as the government on Friday Nov 06,2015 decided to impose a 0.5% cess on all taxable services to fund the Swachh Bharat programme.
The additional cess would be over and above the 14 per cent Service Tax rate which is already being levied and may yield the government an additional about Rs 400 crore during the remainder of the current fiscal.
"The government has decided to impose, with effect from November 15, 2015, a Swachh Bharat Cess at the rate of 0.5 per cent on all services, which are presently liable to service tax," a Finance Ministry statement said.
"Swachh Bharat cess is not another tax but a step towards involving each and every citizen in making contribution to Swachh Bharat. The proceeds from this cess will be exclusively used for Swachh Bharat initiatives," the statement added
Finance Minister Arun Jaitley had in Budget 2015-16 proposed to levy a Swachh Bharat cess of up to 2% "on all or certain services, if need arises". The decision to impose 0.5 per cent cess will translate into a tax of 50 paise only on every Rs 100 worth of taxable services
In his Budget speech on February 28, Jaitley had said, "This cess will
be effective from a date to be notified. Resources generated from this
cess will be utilised for financing and promoting initiatives towards
Swachh Bharat". The government had in Budget 2015-16 estimated to
collect over Rs 2.09 lakh crore from service tax. The Rs 400 crore
collection from the cess would be over and above that.
Note
Service Tax increased from 12.36% to 14% wef 01.06.2015
All services, including air travel, telephony, eating out and banking will become expensive from November 15,2015 as the government on Friday Nov 06,2015 decided to impose a 0.5% cess on all taxable services to fund the Swachh Bharat programme.
The additional cess would be over and above the 14 per cent Service Tax rate which is already being levied and may yield the government an additional about Rs 400 crore during the remainder of the current fiscal.
"The government has decided to impose, with effect from November 15, 2015, a Swachh Bharat Cess at the rate of 0.5 per cent on all services, which are presently liable to service tax," a Finance Ministry statement said.
"Swachh Bharat cess is not another tax but a step towards involving each and every citizen in making contribution to Swachh Bharat. The proceeds from this cess will be exclusively used for Swachh Bharat initiatives," the statement added
Finance Minister Arun Jaitley had in Budget 2015-16 proposed to levy a Swachh Bharat cess of up to 2% "on all or certain services, if need arises". The decision to impose 0.5 per cent cess will translate into a tax of 50 paise only on every Rs 100 worth of taxable services
Note
Service Tax increased from 12.36% to 14% wef 01.06.2015
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