The government on Friday said it will impose a Swachh Bharat cess of 0.5% on all services liable for service tax, effective from November 15, 2015, with the aim of boosting the clean India initiative.
The Swachh Bharat cess will be an additional levy, making the effective service tax rate 14.05% against the current 14%.
“Swachh Bharat Cess is not another tax but a step towards involving each and every citizen in making contribution to Swachh Bharat. The 0.5% levy will translate into a tax of 50 paisa only on every Rs 100 worth of taxable services,” the finance ministry statement read.
The ministry added that given the current population of more than 1.2 billion, India needs to have a “fair share of cleanliness concerns”.