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2. Introduction
Vide Notification No. 22/2015 of Service Tax dated 6th
November, 2015, Government has increased the rate of
Service Tax from 14 percent to 14.5 percent by imposing
a new cess called “Swachh Bharat Cess (SBC)” @ 0.5
percent of the value of taxable services.
Confusion arises of various aspects including whether or
not this additional SBC is available for CENVAT credit
and for Refund in case of duty paid for services used for
export of material / services.
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3. Amendment in Notification No. 39/2012
Amendment is made in Notification No.
39/2012 of Service Tax for Inclusion of
Swachh Bharat Cess in definition of “service
tax and cess” for grant of rebate on export
of services
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4. Amendment in Notification No. 39/2012
Notification No. 03/2016-ST dated
03.02.2016 (“Notification”) has amended
Notification No. 39/2012-S.T. dated
20.06.2012 (“Notification No. 39/2012-
S.T.”) which grants rebate of service tax
paid on input services used for export of
services.
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5. Notification No. 03/2016-ST
Vide the said Notification, the following clause (d) has
been added to the definition of “service tax and cess”:
“(d) Swachh Bharat Cess as levied under sub-section (2)
of section 119 of the Finance Act, 2015 (20 of 2015)”
As an effect of the above, the exporter of services
would now be entitled to claim refund of Swachh
Bharat Cess incurred on services procured and used in
connection with export of services.
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6. Notification No. 03/2016-ST
The Notification has been made effective from
03.02.2016 and there is no mention about the status of
Swachh Bharat Cess paid on services received and used
in connection with on export of services undertaken for
the period 15.11.2015 to 02.02.2016.
Notification is dealing with the refund of Swachh Bharat
Cess paid on services used for export but there is no
mention of availing the cenvat credit of Swachh Bharat
Cess paid on such services (in case of exports).
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