Service tax rate goes up from 14% to 14.5% w.e.f 15th Nov 2015 vide notification 22/2015 ST dated 6-11-2015. The government has decided to impose, a Swachh Bharat Cess at the rate of 0.5 per cent on all services, which are presently liable to service tax.
The additional cess would be over and above the 14 per cent Service Tax rate which is already being levied and may yield the government an additional about Rs 400 crore during the remainder of the current fiscal.
Finance minister Arun Jaitley had in Budget 2015-16 proposed to levy a Swachh Bharat cess of up to 2 per cent “on all or certain services, if need arises”.
Swachh Bharat is among the major initiatives of the Modi government, which has embarked on a major drive to ensure cleanliness across the country.