Swachh Bharat Cess - FAQ adds to confusion

Dear Friends
I appreciate the fact that you have every right to raise the issues surrounding SBC. But to say that SBC is to be treated as Service Tax and therefore eligible for recipients to avail as CENVAT Credit and likewise correspondingly the service provider is eligible to avail CENVAT Credit to discharge the SBC is preposterous to say the least. While there is no denying the fact that SBC is levied as Service Tax a cursory glance at subsection 5 of Section 119 of Finance Act 2015 makes it abundantly clear that the provisions of Chapter V of Finance Act 1994 and the rules made thereunder including those relating to refunds and exemptions from tax interest and imposition of penalty shall as far as may be apply in relation to levy and collection of SBC on taxable services as they apply in relation to levy and collection of Service tax on taxable services. So the crux of the matter is the phrase as far as may be in subsection 5 of section 119 of Finance Act 2015. So the rules made under Chapter V of Finance Act 1994 relating to CENVAT Credit of service tax should allow availment and utilization of SBC. Unless subrules 1 and 4 of Rule 3 of CCR 2004 are amended to allow SBC for availment and utilization respectively SBC is out of CENVAT Credit chain. It is another matter to lament that this is going to be an additional cost to the recipients. That is a small price to pay to keep our country clean if we go by the primary objective of this levy. So let us face it. SBC is out of CENVAT chain. And every other aspect of Service Tax will be applicable to SBC. That is refunds exemptions will be available in respect of SBC.

Regards
Santosh Hatwar

santosh hatwar 18/11/2015