Swachh Bharat Cess has been introduced by the Central Government to be levied on all or any of the taxable services at the rate of 0.5% on the value of taxable services. This Cess has been introduced to finance and promote the Swachh Bharat initiatives.
The Central Government has notified that Swachh Bharat cess will be applicable from 15th November 2015 vide Notification No 21/2015-ST and 22/2015-ST dated 6th November 2015.
This cess is applicable in addition to the service tax levied on taxable services, thus making the effective rate at 14.5% on all taxable services. Swachh Bharat Cess is not levied on services which are either fully exempt from service tax or those covered under the negative list of services.
Further clarifications reported that Swachh Bharat Cess will be levied at the rate of 0.5% on values of all taxable services after availing abatement.
The proceeds from the Swachh bharat cess will be credited to the Consolidated Fund of India. The government may then be used for the purposes of financing and promoting Swachh Bharat initiatives.
The Swachh Bharat Cess has to be levied, charged, collected and paid to the Government independent of service tax. This means that it needs to be charged separately on the invoice, accounted for separately in the books of account and paid separately under separate accounting code.
For further, detailed information, take a look at the following: FAQs on Swachh Bharat Cess