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Wednesday, 20 January 2016

FM to present Union Budget 2016-17 on Feb 29

FM to present Union Budget 2016-17 on Feb 29

Minister of State for Finance Jayant Sinha on Thursday said the government will present the Budget for 2016-17 on February 29, which will set a roadmap for the coming three years. As per internal sources Budget session could begin from February 23. The date of the presentation of the Budget and the reconvening of the Parliament for budget session will be announced after the approval of the Union cabinet. The Finance Minister’s Budget team comprises Minister of State for Finance Jayant Sinha, Chief Economic Advisor Arvind Subramanian and NITI Aayog vice chairman Arvind Panagariya.
The official team is led by Finance Secretary Ratan Watal, DEA Secretary Shaktikanta Das, Revenue Secretary Hasmukh Adhia and Disinvestment Secretary Neeraj Gupta.

FM to present Union Budget 2016-17 on Feb 29

Monday, 18 January 2016

Steps for e-Payment of Service Tax

Steps for e-Payment of Service Tax

e-payment through EASIEST:

Under EASIEST, the assessee is required to access the NSDL-EASIEST website, and select the option, E-Payment (Excise & Service Tax).

The following steps are involved in the process:
1.   To pay Excise Duty and Service Tax online, the Assessee has to enter the 15 digit Assessee Code allotted by the jurisdictional Commissionerate.

2.   There will be an online check to validate the Assessee Code entered.

3.   If the Assessee code is valid, then corresponding assessee details like Name, Address, Commissionerate code etc. as present in the Assessee Code Master will be displayed.

4.   Based on the Assessee Code, the duty / tax i.e. Excise duty or Service tax to be paid will be automatically selected.

5.   The Assessee is required to select the type of duty / tax to be paid by clicking on the button "Select Accounting Codes for Excise" or "Select Accounting Codes for Service Tax" depending on the type of duty / tax to be paid.

6.   At a time the assessee can select upto six Accounting Codes.

7.   Once the data is validated in the NSDL central system, a drop down menu will appear indicating the names of various banks offering internet payment facility. The Assessee can opt for any of these banks through which payment is to be made.

8.   On submission of data entered, a confirmation screen will be displayed. If the taxpayer confirms the data entered in the screen, it will be directed to the net-banking site of the bank selected.

9.   The challan details entered by the Assessee will be transmitted to the bank along with the location code (Commissionerate, division, range code) of the Assessee. (Parameters that will be passed from NSDL to the Banks are given below.)

10.  The taxpayer will login to the net-banking site with the user ID/ password provided by the bank for 
net-banking purpose and enter payment details at the bank site.

11.  On successful payment, a challan counterfoil will be displayed containing CIN, payment details and bank name through which e-payment has been made. This counterfoil is proof of payment being made.

12.  The Assessee has an option to download the counterfoil from the website of the bank. This will contain all details available that are usually given in the hard copy of the computerized acknowledgement including Challan Identification Number (CIN) and name of the bank through which e-payment has been made.

13. After e-payment of central excise duty / service tax, the Assessees may view the "challan status enquiry" in the website so as to confirm that the e-payment challan is uploaded / found in the EASIEST (NSDL) website. In case of non-availability of challan data in the EASIEST (NSDL) website, a complaint may be lodged with

  Steps for e-Payment of Service Tax

Sunday, 17 January 2016



Q.1     What is Swachh Bharat Cess (SBC)?

Ans.   It is a Cess which shall be levied and collected in accordance with the provisions of Chapter VI of the Finance Act, 2015,called Swachh Bharat Cess, as service tax on  all the taxable services at the rate of 0.5% of the value of taxable service.

Q.2      What is the date of implementation of SBC?

Ans. The Central Government has appointed 15th day of November, 2015 as the date from which provisions of Swachh Bharat Cess will come into effect (notification No.21/2015-Service Tax, dated 6th November, 2015 refers).

Q.3     Whether SBC would be leviable on exempted services and services in the negative list?

Ans. Swachh Bharat Cess is not leviable on services which are fully exempt from service tax or those covered under the negative list of services.

Q.4     Why has SBC been imposed?

Ans. SBC has been imposed for the purposes of financing and promoting Swachh Bharat initiatives or for any other purpose relating thereto.

Q. 5    Where will the money collected under SBC go?

Ans. Proceeds of the SBC will be credited to the Consolidated Fund of India, and the Central

Government may, after due appropriation made by Parliament, utilise such sums of money of the

SBC for the purposes of financing and promoting Swachh Bharat initiatives or for any other purpose relating thereto.

Q.6     How will the SBC  be calculated?

Ans. SBC would be calculated in the same way as Service tax is calculated. Therefore, SBC

would be levied on the same taxable value as service tax.

Q. 7    Whether SBC would be required to be mentioned separately in invoice?

Ans.  SBC would be levied, charged, collected and paid to Government independent of service tax. This needs to be charged separately on the invoice, accounted for separately in the books of account and paid separately under separate accounting code which would be notified shortly. SBC may be charged separately after service tax as a different line item in invoice. It can be accounted and treated similarly to Education cesses.

Recommended Read: Salient Features of GST

Q. 8    Whether separate accounting code will be there for Swachh Bharat Cess?

Ans. Yes, for payment of Swachh Bharat Cess, a separate accounting code would be notified shortly in consultation with the Principal Chief Controller of Accounts. These are as follows:-

Swachh Bharat Cess
(Minor Head)
Other Receipts

Q. 9    What would be effective rate of service tax and SBC post introduction of SBC?

Ans. Effective rate of service tax plus SBC, post introduction of SBC, would be [14% + 0.5%].

Q.10    Whether SBC is a ‘Cess on tax’ and we need to calculate SBC @ 0.50% on the amount of service tax like we were earlier doing for calculating Education Cess and SHE Cess?

Ans.   No, SBC is not a cess on Service Tax. SBC shall be levied @ 0.5% on  the value of taxable services.

Q. 11   Whether SBC is levied on all or selected services?

Ans.    The Central Government was empowered to impose SBC either on all or some of the taxable services. Vide notification No 22/2015-ST dated 6-11-2015, Government has notified

that SBC shall be applicable on all taxable services except services which are either fully exempt from service tax under any notification issued under section 93(1) of the Finance Act, 1994 or are otherwise not leviable to service tax under section 66B of the Finance Act, 1994.

Q.12   How will the SBC be calculated for services under reverse charge mechanism?

Ans. In case of reverse charge under section 68(2) of the Finance Act, 1994, the liability has been shifted from service provider to the service recipient. As per section 119 (5) of the Finance Act, 2015, the provisions of Chapter V of the Finance Act, 1994, and the rules made thereunder are applicable to SBC also. Thus, the reverse charge under section 68(2) of the Finance Act,
1994, is made applicable to SBC. In this context, to clarify, Government has issued notification No. 24/2015-Service Tax  dated 12th   November,  2015  to  provide that  reverse  charge  under notification No.30/2012-Service Tax dated 20th June, 2012 shall be applicable for the purpose of levy of Swachh Bharat Cess mutatis mutandis.

Q.13   How will SBC be calculated for services where abatement is allowed?

Ans. Taxable services, on which service tax is leviable on a certain percentage of value of taxable service, will attract SBC on the same percentage of value as provided in the notification No. 26/2012-Service Tax, dated 20th June, 2012. So, this notification would apply for SBC also in the same manner as it applies for service tax.

For example, in the case of GTA, [Service Tax + SBC]% would be (14% Service Tax + 0.5% SBC) X 30% = 4.35% (4.20%+0.15%)

Q.14   Whether Cenvat Credit of the SBC is available?

Ans. SBC is  not integrated in the Cenvat Credit Chain. Therefore, credit of SBC cannot be availed. Further, SBC cannot be paid by utilizing credit of any other duty or tax.

Q.15   What would be the point of taxation for Swachh Bharat Cess?

Ans. As regards Point of Taxation, since this levy has come for the first time, all services (except those services which are in the Negative List or are wholly exempt from service tax) are being subjected to SBC for the first time. SBC, therefore, is a new levy, which was not in existence earlier. Hence, rule 5 of the Point of Taxation Rules would be applicable in this case.  Therefore, in cases where payment has been received and invoice is raised before the service becomes taxable, i.e. prior to 15th  November, 2015, there is no lability of Swachh Bharat Cess. In cases

where payment has been received before the service became taxable and invoice is raised within

14 days, i.e. upto 29th November, 2015, even then the service tax liability does not arise. Swachh Bharat Cess will be payable  on  services which are provided on or after 15th Nov, 2015, invoice in respect of which is issued on or after that date and payment is also received on or after that date. Swachh Bharat Cess will also be payable where service is provided on or after 15th  Nov,
2015 but payment is received prior to that date and invoice in respect of such service is not issued by 29th Nov, 2015.

Q.16    How would the tax (Service Tax and SBC) be calculated on services covered under

Rule 2A, 2B or 2C of Service Tax (Determination of Value) Rules, 2006.?

Ans. The tax (Service Tax and SBC) on services covered by Rule 2A, 2B or 2C of Service Tax (Determination of Value) Rules, 2006, would be computed by multiplying the value determined in accordance with these respective rules with [14% + 0.5%]. Therefore, effective rate of Service Tax plus SBC in case of original works and other than original works under the works contract service would be 5.8% [(14% + 0.5%)*40%] and 10.15% [(14% + 0.5%)*70%] respectively. Similar, would be the tax treatment for restaurant and outdoor catering services.

Q.17    How would the tax be calculated on restaurant services covered under Service Tax

(Determination of Value) Rules, 2006.?

Ans. Swachh Bharat Cess would be calculated on the value arrived at in accordance with the Service Tax (Determination of Value) Rules, 2006. For example, the effective Swachh Bharat Cess in respect of services provided in relation to serving of food or beverages by a restaurant, eating joint or a mess, having the facility of airconditioning or central air-heating in any part of the establishment, would be 0.5% of 40% of the total amount, i.e, 0.2% of the total amount. The cumulative service tax and Swachh Bharat Cess liability would be [14% ST + 0.5% SBC] of
40% of the total amount, i.e., 5.8% of the total amount charged.

Q.18    Whether SBC would be applicable on services covered by Rule 6 of Service Tax Rules (i.e. air travel agent, life insurance premium, purchase and sale of foreign currency and services by lottery distributors/selling agents)

Ans.    Sub-rule (7D) to rule 6 has been inserted vide notification 25/2015-Service Tax, dated

12th November, 2015 so as to provide that the person liable for paying the service tax under sub-

rule (7), (7A), (7B) or (7C) of rule 6 of Service Tax Rules, shall have the option to pay SBC as determined as per the following formula:-

Service Tax liability [calculated as per sub-rule (7), (7A), (7B) or (7C)] X 0.5%/14%

The option under this sub-rule once exercised, shall apply uniformly in respect of such services and shall not be changed during a financial year under any circumstances.


Q. 19   How would liability be determined in case of reverse charge services where services have been received prior to 15.11.2015 but consideration paid post 15.11.2015?

Ans.    In respect of reverse charge mechanism, SBC liability is determined in accordance with Rule 7 of Point of Taxation Rules, as per which, point of taxation is the date on which consideration is paid to the service provider. Thus, SBC liability in such case will be 0.5% X Value of taxable service.

Q.20    Does a person providing both exempted and taxable service and reversing credit @

7% of value of exempted service under Rule 6 of Cenvat Credit Rules, does he need to reverse the SBC also?

Ans.    As SBC is not integrated in the Cenvat Credit chain and reversal under Rule 6 is payment of amount equal to 7% of the value of exempted services, hence, reversal of SBC is not required under Rule 6 of Cenvat Credit Rules, 2004.