Interview Questions.

Question 1. What Is Swachh Bharat Cess (sbc)?

Answer :

It is a Cess which will be levied and collected according with the provisions of Chapter VI of the Finance Act, 2015,called Swachh Bharat Cess, as provider tax on all the taxable offerings at the price of zero.Five% of the fee of taxable carrier.

Question 2. What Is The Date Of Implementation Of Sbc?

Answer :

The Central Government has appointed 15th day of November, 2015 as the date from which provisions of Swachh Bharat Cess will come into impact (notification No.21/2015-Service Tax, dated sixth November, 2015 refers).

Auditing Interview Questions
Question three. Whether Sbc Would Be Leviable On Exempted Services And Services In The Negative List?

Answer :

Swachh Bharat Cess isn't leviable on services which might be fully exempt from provider tax or those covered below the poor list of services.

Question 4. Why Has Sbc Been Imposed?

Answer :

SBC has been imposed for the functions of financing and promoting Swachh Bharat tasks or for another purpose relating thereto.

Accounting Basics Tutorial
Question five. Where Will The Money Collected Under Sbc Go?

Answer :

Proceeds of the SBC could be credited to the Consolidated Fund of India, and the Central Government may also, after due appropriation made by Parliament, utilise such sums of cash of the 3 SBC for the functions of financing and selling Swachh Bharat initiatives or for some other reason touching on thereto.

Taxation Interview Questions
Question 6. How Will The Sbc Be Calculated?

Answer :

SBC might be calculated within the same way as Service tax is calculated. Therefore, SBC would be levied on the identical taxable cost as service tax.

Question 7. Whether Sbc Would Be Required To Be Mentioned Separately In Invoice?

Answer :

SBC might be levied, charged, gathered and paid to Government unbiased of provider tax. This wishes to be charged one after the other at the bill, accounted for one after the other in the books of account and paid one by one beneath separate accounting code which would be notified quickly.SBC may be charged one at a time after carrier tax as a distinctive line object in invoice. It can be accounted and handled further to Education cesses.

Finance Interview Questions
Question eight. What Would Be Effective Rate Of Service Tax And Sbc Post Introduction Of Sbc?

Answer :

Effective price of provider tax plus SBC, put up introduction of SBC, might be [14% + 0.5%].

Question nine. Whether Sbc Is A ‘cess’ On Tax’ And We Need To Calculate Sbc @ zero.50% On The Amount Of Service Tax Like We Were Earlier Doing For Calculating Education Cess And She Cess?

Answer :

No, SBC isn't always a cess on Service Tax. SBC will be levied @ 0.Five% on the value of taxable offerings.

VAT Interview Questions
Question 10. Whether Sbc Is Levied On All Or Selected Services?

Answer :

The Central Government become empowered to impose SBC both on all or a number of the taxable services. Vide notification No 22/2015-ST dated 6-eleven-2015, Government has notified four that SBC will be relevant on all taxable offerings except offerings which can be either fully exempt from carrier tax underneath any notification issued underneath phase ninety three(1) of the Finance Act, 1994 or are in any other case now not leviable to service tax underneath segment 66B of the Finance Act, 1994.

Question eleven. How Will The Sbc Be Calculated For Services Under Reverse Charge Mechanism?

Answer :

In case of opposite charge underneath section sixty eight(2) of the Finance Act, 1994, the legal responsibility has been shifted from service issuer to the provider recipient. As in line with segment 119 (5) of the Finance Act, 2015, the provisions of Chapter V of the Finance Act, 1994, and the regulations made thereunder are relevant to SBC additionally. Thus, the reverse price below phase 68(2) of the Finance Act, 1994, is made applicable to SBC. In this context, to make clear, Government has issued notification No. 24/2015-Service Tax dated twelfth November, 2015 to offer that reverse fee beneath notification No.30/2012-Service Tax dated 20th June, 2012 shall be relevant for the reason of levy of Swachh Bharat Cess mutatis mutandis.

US Taxation Interview Questions
Question 12. How Will Sbc Be Calculated For Services Where Abatement Is Allowed?

Answer :

Taxable offerings, on which carrier tax is leviable on a positive percentage of price of taxable provider, will appeal to SBC on the identical percent of fee as furnished in the notification No. 26/2012-Service Tax, dated 20th June, 2012. So, this notification would observe for SBC also within the equal manner because it applies for provider tax.

For example:

within the case of GTA, [Service Tax + SBC]% would be (14% Service Tax + 0.Five%SBC) X 30% = 4.35% (4.20%+zero.15%)

Auditing Interview Questions
Question 13. Whether Cenvat Credit Of The Sbc Is Available?

Answer :

SBC isn't incorporated within the Cenvat Credit Chain. Therefore, credit of SBC cannot be availed. Further, SBC can't be paid via using credit score of another obligation or tax.

Question 14. What Would Be The Point Of Taxation For Swachh Bharat Cess?

Answer :

As regards Point of Taxation, due to the fact this levy has come for the first time, all offerings (except those services which can be in the Negative List or are completely exempt from carrier tax) are being subjected to SBC for the primary time. SBC, therefore, is a new levy, which changed into not in lifestyles in advance. Hence, rule five of the Point of Taxation Rules might be relevant in this situation. Therefore,in cases wherein fee has been received and invoice is raised earlier than the provider becomes taxable, i.E. Previous to 15th November, 2015, there may be no lability of Swachh Bharat Cess. In cases where charge has been received earlier than the service have become taxable and bill is raised inside 14 days, i.E. Upto twenty ninth November, 2015, even then the carrier tax liability does now not rise up. SwachhBharat Cess could be payable on offerings which can be furnished on or after 15th Nov, 2015, bill in admire of that's issued on or after that date and payment is likewise obtained on or after that date. Swachh Bharat Cess will also be payable where provider is supplied on or after 15th Nov, 2015 but payment is obtained previous to that date and invoice in recognize of such provider is notissued through 29th Nov, 2015.

Question 15. How Would The Tax (provider Tax And Sbc) Be Calculated On Services Covered Under Rule 2a, 2b Or 2c Of Service Tax (willpower Of Value) Rules, 2006.?

Answer :

The tax (Service Tax and SBC) on services protected by way of Rule 2A, 2B or 2C of Service Tax(Determination of Value) Rules, 2006, could be computed by means of multiplying the cost decided in accordance with these respective guidelines with [14% + 0.5%]. Therefore, powerful rate of Service Tax plus SBC in case of unique works and apart from original works under the works settlement provider would be five.Eight% [(14% + 0.5%)*40%] and 10.15% [(14% + 0.5%)*70%] respectively.Similar, would be the tax treatment for restaurant and outside catering offerings.

Goods and Services Tax Interview Questions
Question sixteen. How Would The Tax Be Calculated On Restaurant Services Covered Under Service Tax(determination Of Value) Rules, 2006.?

Answer :

Swachh Bharat Cess would be calculated at the cost arrived at according with the Service Tax (Determination of Value) Rules, 2006. For instance, the effective Swachh Bharat Cess in appreciate of services supplied in terms of serving of food or liquids by way of a restaurant, eating joint or a mess, having the ability of air–conditioning or relevant air-heating in any a part of the status quo, might be zero.5% of forty% of the overall quantity, i.E, zero.2% of the entire quantity. The cumulative service tax and Swachh Bharat Cess liability would be [14% ST + 0.5% SBC] of 40% of the entire amount, i.E., five.8% of the total amount charged.

Question 17. Whether Sbc Would Be Applicable On Services Covered By Rule 6 Of Service Tax Rules (i.E. Air Travel Agent, Life Insurance Premium, Purchase And Sale Of Foreign Currency And Services By Lottery Distributors/promoting Agents)?

Answer :

Sub-rule (7D) to rule 6 has been inserted vide notification 25/2015-Service Tax, dated 12th November, 2015 which will provide that the individual answerable for paying the carrier tax underneath sub-rule (7), (7A), (7B) or (7C) of rule 6 of Service Tax Rules, shall have the choice to pay SBC as decided as in line with the subsequent formula:-Service Tax liability [calculated as per sub-rule (7), (7A), (7B) or (7C)] X zero.5%/14% The choice below this sub-rule once exercised, shall practice uniformly in recognize of such services and shall no longer be changed in the course of a financial 12 months beneath any occasions.

Anti Dumping Duty Tax Interview Questions
Question 18. How Would Liability Be Determined In Case Of Reverse Charge Services Where Services Have Been Received Prior To 15.Eleven.2015 But Consideration Paid Post 15.11.2015?

Answer :

In appreciate of reverse price mechanism, SBC liability is determined in accordance with Rule 7 of Point of Taxation Rules, as in keeping with which, factor of taxation is the date on which consideration is paid to the service provider. Thus, SBC legal responsibility in such case will be 0.Five% X Value of taxable provider.

Taxation Interview Questions
Question 19. Does A Person Providing Both Exempted And Taxable Service And Reversing Credit @ 7% Of Value Of Exempted Service Under Rule 6 Of Cenvat Credit Rules, Does He Need To Reverse The Sbc Also?

Answer :

As SBC isn't integrated in the Cenvat Credit chain and reversal beneath Rule 6 is charge of amount identical to 7% of the fee of exempted offerings, as a result, reversal of SBC is not required below Rule 6 of Cenvat Credit Rules, 2004.