With an intent to make a move towards environment protection, Honorable Finance Minister in Finance Bill, 2015, vide clause 117 of Chapter VI, has proposed ‘Swachh Bharat Cess’ (herein after referred as ‘SBC’) @ 2% on the value of services. Today vide Notification No. 21/2015-ST, Central Government appoints 15th November, 2015 as the date of introduction of SBC. Central Government has also issued Notification No. 22/2015-ST to exempt all taxable services from payment of SBC in excess of 0.5% of the value of services.

Therefore w.e.f. 15th November, 2015 ‘Swachh Bharat Cess’ @ 0.5% will apply on value of all taxable services or we can say w.e.f. 15th November, 2015 effective rate of service tax will be 14.5%.

Here, it is pertinent to mention that SBC will not apply on non-taxable services and services which are exempt from service tax.