Swachha bharat cess is admissible input deduction.

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10 December 2015 Swachha Bharat Cess is admissible to get cenvat credit.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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10 December 2015 CENVAT not applicable for SB cess

CA CS Jainam Shah

CA CS Jainam Shah (Expert)
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10 December 2015 SBC whether eligible as CENVAT Credit:

No specific amendments are made in CENVAT Credit Rules, 2004 to expressly facilitate service receiver to take CENVAT Credit of SBC. Further it has been clarified in the FAQs that service receiver cannot avail CENVAT Credit of SBC as the said tax is not integrated in the CENVAT chain.

However sub-section (5) of Section 119 of Finance Act, 2015 which provides for levy of SBC, expressly provides that the provisions of Finance Act, 1994 and rules made thereunder are applicable to levy and collection of SBC. CENVAT Credit is an aspect related to collection of SBC and on this count, CENVAT Credit Rules, 2004 may even be applicable to SBC.

In the case of CCE vs. Shree Renuka Sugars Ltd, 2015-TIOL-1478-HC-KAR-CX wherein it was considered whether sugar cess levied on imported sugar under Sugar Cess Act, 1982 is eligible for CENVAT Credit. Under Sugar Cess Act, 1982 also, provisions of Central Excise Act, 1944 and rules made thereunder are made applicable for levy and collection of sugar cess. In such scenario, the Karnataka High Court held that even in the absence of specific provisions in CENVAT Credit Rules, 2005 about sugar cess, it is nothing but excise duty under Rule 3 of the CENVAT Credit Rules, 2004 and accordingly eligible for CENVAT Credit.

Applying the same analogy to SBC, it appears that a service receiver is eligible for CENVAT Credit of SBC even in the absence of specific provisions in CENVAT Credit Rules, 2004 in this regard.

However, those assessees adopting conservative approach have to be very cautious in availing the credit post implementation of SBC as it may be possible that some of the vendors do not disclose service tax and SBC component separately in their invoices which might lead to availment of SBC. Hence, the assessee has to be very cautious and avail only such component pertaining to service tax as credit and not the SBC.

Source: Article Posted on CAClubIndia.com

https://www.caclubindia.com/articles/a-to-z-of-swachh-bharat-cess-25618.asp

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