CIN changes for Swachh Bharath Cess Implementation

[Former Member]

Dear All

As per the guidelines from Central Government, The levy of Swachh Bharath Cess (SBC) as provided under section 119 of the Finance Act, 2015 will become effective from appointed date i.e 15.11.2015 on all taxable services at 0.5% of the value of the taxable services. Effectively the new rate of service tax would be 14.5%. Introduction of this cess was seen as precursor to introduction of GST.  

                                                                                                                                       - Notification No 21/2015 and 22/2015 Dated 06.11.2015

Key Points.

1.     The SBC is leviable on value of all taxable services.

2.     SBC is calculated on Value of taxable service not on service tax amount.

3.     Needs to be charged seperately and needs to be accounted seperately.

4.     Swatch Bharath Cess is applicable only on Services not on manufacture of Goods.

5.     No info on CENVAT credit as of now.

Configuration Steps

For Input Tax 

1. Creation of Processing Key (OBCN)
2. Creation of Condition Type (OBQ1)
3. Pricing Procedure changes as per new Process Key and Condition Type. (SPRO-->FA-->FA Global settings-->Tax on sales/purchases-->Basic settings-->Check and change settings for Tax processing.)
4. Creation of New G/L account(FS01).
5. Assigning G/L account for relavent tax code (OB40).
6. Maintaining Condition Record of 0.5% in FV11 or FTXP.

For OutputTax 

1. Create New Condition in V/06.
2. Creation of Account Keys (SPRO-->Sales and Distribution-->Basic functions-->Account assignment/Costing-->Revenue account determination-->Define and assign account keys).
3. Assign SBC COndition Type in Pricing using V/08.
4. Maintain Condition Record of 0.5% in VK11.
5. Create G/L accounts.
6. Assign G/L accounts for Account keys in VKOA.

Hope this info is useful.

Thanks

Siva