Government to impose 0.5% Swachh Bharat cess on services from November 15

NEW DELHI: Soon after the Diwali festivities, you will have to shell out a bit more for all the services so that the country can become cleaner.

The government has decided to levy the Swachh Bharat Cess proposed in the budget on all services that are at present taxed from November 15. The cess will be levied at the rate of 0.5%, the finance ministry said in a statement, adding that it will have only marginal impact on consumer prices. “This will translate into a tax of 50 paisa only on every one hundred rupees worth of taxable services,” the statement said. “Swachh Bharat Cess is not another tax but a step towards involving each and every citizen in making contribution to Swachh Bharat,” it said. India taxes services based on a negative list; that is, any service not especially excluded from this levy is taxed.

The finance ministry said the proceeds from the new cess will be used exclusively for the Swachh Bharat initiative. In the budget for this year the government had raised service tax to 14% from 12.36% (including cess) and retained the option of levying a cess on any or all services to fund Swachh Bharat Mission if needed. “We are a country of more than 120 crore people. For such a vast and populous country we do have our fair share of cleanliness concerns. In fact, persons entrusted with the job of keeping our country clean struggle constantly,” the finance ministry statement said.

“According to the Government of India estimates, expenditure on health adds up to Rs 6,700 crore annually (approximately Rs 60 per capita). Increased allocation for Swachh Bharat Abhiyan can prevent many of these diseases with consequential benefit to one and all,” it said. Swachh Bharat is one of the pet schemes of Prime Minister Narendra Modi.