6 things to know about Swachh Bharat cess



Swachh Bharat is an initiative which was driven by Prime Minister Narendra Modi to make India Clean. We really know how much clean our India is. India means not only the metros cities but also B & C class cities and most probably the villages, which must be understood by the government. 

Now Central Government has decided to collect Swachh Bharat cess on Services Tax. Over the years government is collecting Education Cess [EC] & Secondary and Higher Education cess [SHEC] on direct taxes which is to be utilized for increment and spread of education. But it is not reaching to 100% people.

Here we discussed some points about Swachh Bharat cess to have basic idea.

Q 1 ]. On What services Swachh Bharat cess is leviable?

All services [Except on Exempted Services & Services listed in the Negative List], including Air travel, Telecom, Eating out in Restaurants and Banking, will become expensive from 15thNovember 2015 as the government of India decided to impose a 0.5% cess on all taxable services to fund the Swachh Bharat programme.

Normally in Restaurants, there are lot of issues on collection of Service tax regarding some hotels charging excess service tax from their customers fraudulently. By adding one more cess to be collected in the form of Swacch Bharat Cess, it may allow some restaurants to collect extra money from their customers. Government should take Swacch (clean) action on such restaurants by calling the Tax department to have a Surprise check on such restaurants and make people happy.

Q 2 ]. How much is the Rate of Swachh Bharat cess on Services Tax ?

This additional cess of 0.5% would be over and above the 14 per cent service tax rate, which is already being levied which is now 14.50%.

Q 3]. How much Revenue government may yield ?

Government may yield the an additional revenue about Rs 400 crore during the remainder of the current fiscal. 

If at all the government may spend entire Rs.400 crores properly on the  Swachh Bharat programme it is not at all difficult to see clean India soon. 

Q 4 ]. Is there any further hike on the cess ?

Finance Minister Arun Jaitley had in Budget 2015-16 proposed to levy a Swachh Bharat cess of upto 2% "on all or certain services, if need arises".

So, there may be any chance of hiking it in future

Q 5 ] Is Swachh Bharat cess another tax ?

No, "Swachh Bharat cess is not an another tax" but a step towards involving each and every citizen in making contribution to Swachh Bharat.

Q 6] How the money collected from this fund will be utilised ?

The proceeds from this cess will be exclusively used for Swachh Bharat initiatives.


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About the Author

Accounts Manager

- I am (R.Sravan Kumar) Qualified Cost Management Accountant [CMA] in the year 2012. - Also Secured All India 101st Rank in CMA Inter in the year 2010. - Received theawardofCertificate of Merit from the Institute of Cost Accountants of India (ICAI). - Semi-qualified Chartered Accountant also. - Part-time ... Read more

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