Akshay Gandhi (Student CA IPC / IPCC) (25 Points)
10 March 2015Hey everyone,
As per clause 117 of finance bill 2015. 2% Clean india cess on value of services shall be applicable other than service tax i.e. 14%.
But according to the definitions CESS is a term which is fixed percentage applicable on tha tax amount. so what will be the effective rate of tax:
1. 14.28% i.e. 14 of service tax plus 2% of 14% that is 0.28%
or
2. 16 % i.e. 14(service tax) + 2(Clean india Cess)??????
Deepak Gupta
(CA Student)
(15922 Points)
Replied 10 March 2015
14% + 2% = 16%
.
Relevant extracts from Memorandum to Finance Bill 2015,
.
“An enabling provision is being made to empower the Central Government to impose a Swachh Bharat Cess on all or any of the taxable services at a rate of 2% of the value of such taxable services with the objective of financing and promoting Swachh Bharat initiatives.
.
This Cess shall be levied from a date to be notified by the Central Government in this regard and will not have immediate effect.”
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