‘Clean India, Green India’ is the slogan that practiced by the Indians to clean the country with the full support of the government. For this, the government has announced an overall 0.5% of all tax as Swachh Bharat Cess. Now, after the GST implementation, the new tax amount is 14.5% from 14%. This purely affected many of the companies related to this sector. This comes into the law from November 15 as no date was finalized previously.
Likewise, other tax history, this too created havoc nationwide and become a topic of controversy. There are certain unanswered questions still remaining with this law including,
- What is the overall impact?
- Is there any lack of notice?
- Can we see lack on input credit on Swachh Bharat Cess?
Here, we are discussing some of the main points that can easily trigger by the cess introduced.
- Short of ample notice
The actual notice was issued on November 6th that effectively comes under action on 15th November. Since, it was the Diwali time; most of the persons are in holidays or not working. To be very true, this kind of cess requires major changes that are made using ERP software. And, in such a short time span it is difficult to make any changes or bring under action.
- Presence of confusion and unanswered questions
After the implementation, the CBEC came up with certain amplifications. This fumes up the questions regarding the implementation all over the world. It was that time when the India Inc. came to know that there is no existence of CENVAT credit on Swachh Bharat till now.
- Deficient of input credit
It is very much clear that if there is lack of credit, it can cause the triggering of tumbling effect. That means, the exact percentage of cess can be more than 14.5% written on paper. This is definitely a malfunction in the Swachh Bharat Cess according to the India Inc. not only this, it also has a direct affect on customers.
The common people along with the India Inc. are still in the confusion that how cess is going to affect the GST working. Will there the continuous increase in the service tax and reaches to 16-18% or equivalent to the GST amount?
On the whole, the new cess is less than its proposal. In starting it was proposed to be 2%, while it is levied at the rate of 0.5%. Still, the confusion stick with that will the government levy the remaining 1.5% tax later or exclude it. Does the rate of service tax will still shoot up? It seems like playing with the percentage without knowing the actual benefits of the GST. Many such unanswered questions have made the sleepless night of the entrepreneurs, business owners and common people of India.
Whatever happens, it will definitely bring a positive change in the Indian economy and play a crucial role in making the India clean. Be a part of this good cause and pay your contribution.