Be ready to shell out more as the Swachh Bharat cess will be applicable on all taxable services from November 15 (Sunday). The Brihanmumbai Municipal Corporation (BMC) has issued directives to its officials to strictly implement the collection of additional taxes.
The Centre had proposed to raise service tax from 12.36 per cent (including education cess) to 14 percent from June 1.
It afterwards decided to impose additional 0.5 percent Swachh Bharat cess on all services, which are presently liable to Service Tax.
The proceeds from this cess will be used for financing and promoting Swachh Bharat initiatives.
In the budget, the Centre had proposed a 2 per cent Swachh Bharat cess on selected services, but it was later brought down to 0.5 percent.
The 0.5 per cent cess will translate into a tax of 50 paisa only on every one hundred rupees worth of taxable services. Some of the key services that will attract higher tax as a result are railways, airlines, banking, insurance, advertising, architecture, construction, credit cards, event management and tour operators.
According to the civic officials, all provisions including those related to computation of taxable value, assessment, exemption, payment, penalty applicable to service tax would apply to Swachh Bharat Cess.
In a circular issued to all head of departments and assistant commissioners, the BMC has asked them to collect 14.5 per cent service tax (including education cess) on all taxable municipal services from November 15. This will effect in some increase in the bills for taxable municipal services.
“Though services like water, health, sewerage are exempted from this cess, some of the services like assessment and payments may see a rise in the bills, which will be shown in municipal bills,” said a civic official.
