The government on Thursday clarified that the levy of 0.5 per cent Swachh Bharat cess on services will lead to an increase of only 50 paisa per Rs 100 worth of taxable services while the cess would be applicable only on services received after November 15.
Also, in cases where the service tax is charged at alternative rates like service provided by air travel agents, life insurance service, or service in relation to sale/purchase of foreign exchange, the Swachh Bharat cess would also be levied at alternative rates, an official statement said.
“In case where payment has been received and invoice is raised before the service becomes taxable, i.e., prior to November 15, 2015, there is no liability of Swachh Bharat cess. In case payment has been received before the service became taxable and invoice is raised within 14 days, i.e. up to November 29, 2015, even then the service tax liability does not arise.
Swachh Bharat cess will be payable on services which are provided on or after November 15, 2015, invoice in respect of which is issued on or after that date,” the statement added.