In a move that will increase the cost of running Service Industry whether it is a Restaurant business, Education, Telecommunication, etc. the government of India on Friday (6th Nov, 2015) said that a 0.5% cess would be levied on all taxable services to fund the Swachh Bharat Programme.
The cess will be levied w.e.f. 15th November, 2015, taking the existing Service tax rate from the current 14% to 14.5% as per the Notification No. 22/2015-Service Tax. Swachh Bharat Cess will only be applicable to the taxable services and will not affect exempted services.
The objective behind introducing Swachh Bharat Cess is to fund Government’s flagship program of Swachh Bharat (Clean India). Swachh Bharat Cess is not another tax but a step towards involving each and every citizen in contributing towards making India Clean (Swachh Bharat). The proceeds from this cess will be exclusively used for Swachh Bharat initiatives.