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Clarifications on various aspects of Swachh Bharat Cess

Dear Professional Colleague,
Clarifications on various aspects of Swachh Bharat Cess
Recently, the Central Government vide Notification No. 21/2015-ST and 22/2015-ST, both dated November 6, 2015 had appointed November 15, 2015 as the date from which, Swachh Bharat Cess (“SB Cess”)at the rate of 0.5% on value of all taxable services shall be applicable. However, a sudden imposition of SB Cess created lot of confusionslike to calculate value of taxable services under Abatement Notification, treatment of SB Cess on ongoing transactions, availability of Cenvat credit of SB Cess, etc. Thus, the Central Government has issued following Notifications in order to clarify certainaspects of applicability of SB Cess:
SB Cess at the rate of 0.5% will be levied on value of all taxable services after availing abatement – Notification No. 23/ 2015-ST dated November 12, 2015:
The Central Government has amended Notification No. 22/2015-ST dated November 6, 2015,wherein an effective rate of 0.5%of the value of all taxable services was fixedto clarify that SB Cess will be leviedon value of taxable services afteravailing the benefit of abatements by way of an exemption provided vide Abatement Notification No. 26/2012-ST dated June 20, 2012 i.e. SB Cess would be computed on abated value.
For example, in case of GTA services, presently, abatement of 70% is available and accordingly, Service tax is required to be paid on 30% of value of taxable service after exemption (abatement) of 70% as provided under the said Abatement Notification. The effective rate of Service taxincluding SB Cess would be 4.35% (i.e. 30% of 14.5%).
Value of taxable services for the purposes of SB Cess shall be the value as determined in accordance with the Service Tax (Determination of Value) Rules, 2006 – Notification No. 23/ 2015-ST dated November 12, 2015:
Notification No. 22/2015-ST dated November 6, 2015 has been further amended to provide that value of taxable services for the purposes of SB Cess shall be the value as determined in accordance with the Service Tax (Determination of Value) Rules, 2006. Thus, SB Cess would be levied in the following manner:
a.        Computation of tax under Works contract: In terms of Rule 2A of the Service Tax (Determination of Value) Rules, 2006, Service tax along with SB Cess needs to be applied on taxable value. Accordingly, effective rate of tax would be as under:
ü   In case of original works: 5.8% (14.5%*40%); and
ü   Other than original works: 10.15% (14.5%*70%)
b.        Computation of tax on Restaurant and Outdoor catering services:In terms of Rule 2C of the Service Tax (Determination of Value) Rules, 2006, Service tax along with SB Cess needs to be applied on taxable value.. Accordingly, effective rate of tax would be as under:
ü   In case of AC Restaurant services: 5.8% (14.5%*40%); and
ü   In case of Outdoor catering services: 8.7% (14.5%*60%)
SB Cess along with Service tax shall be paid on services under Reverse Charge Mechanism– Notification No. 24/ 2015-ST dated November 12, 2015:
The Reverse Charge Notification No. 30/2012-ST dated June 20, 2012 prescribes the specified services under full reverse charge wherein 100% service tax to be paid by the Service Recipient and under partial reverse charge wherein both the Service provider and service recipient has to pay specified percentage of Service tax.Now, the Central Government vide Notification No. 24/ 2015-ST dated November 12, 2015, has explicitly clarified that Service tax liability under Reverse charge/ partial reverse charge shall be applicable for the purposes of SB Cess mutatis mutandis.In other words, SB cess along with Service tax shall be paid on taxable services under Reverse Charge Mechanism as well.
Amendment made in Service Tax Rules, 1994 for providing alternate rate for SB Cess– Notification No. 25/ 2015-ST dated November 12, 2015:
As per sub-rules 7,7A,7B and 7C to Rule 6 of the Service Tax Rules, 1994, there is an alternative rate of Service tax for services, namely, air travel agents, insurance premium, purchase & sale of foreign currency and lottery.
Now, the Central Government has amendedService Tax Rules, 1994 vide Notification No. 25/ 2015-ST dated November 12, 2015and thereby, inserted sub-rule (7D) after (7C) under Rule 6 as under:
“(7D) The person liable for paying the service tax under sub-rule (7), (7A), (7B) or (7C) of rule 6, shall have the option to pay such amount as determined by multiplying total service tax liability calculated under sub-rule (7), (7A), (7B) or (7C) of rule 6 by 0.5 and dividing the product by 14 (fourteen),during any calendar month or quarter, as the case may be, towards the discharge of his liability for Swachh Bharat Cess instead of paying Swachh Bharat Cess at the rate specified in sub-section (2) of section 119 of the Finance Act, 2015 (20 of 2015) read with notification No.22/2015-Service Tax, dated the 6th November, 2015, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 843 (E), dated the 6th November, 2015, and the option under this sub-rule once exercised, shall apply uniformly in respect of such services and shall not be changed during a financial year under any circumstances."
In other words, if Service tax is payable at an alternative rate, SB cess would also be computed in proportion to such alternative rate in following manner:
Total Service tax liability calculated under Rule 6(7)(7A), (7B) or (7C) * 0.5
For example, in case of air travel agent services, air travel agent opting alternative rate optionis liable to pay Service tax at the rate of 0.7% of the basic fare in case of domestic bookings. Therefore, SB Cess would be payable at the rate of 0.025% i.e. 0.5 multiplied by 0.7% divided by 14 on this service.
To access complete Notifications, please click on the link below:
Point of Taxation
It is pertinent here to note that the Finance Ministry in its Press Release dated November 12, 2015 has clarified that for determining event when the new levy i.e. SBCess will be leviable ontaxable services, norms laid down in terms of Rule 5 of the Point of Taxation Rules, 2011 would apply in the following manner:
(i) in case where payment has been received and invoice is raised before the service becomes taxable, i.e., prior to November 15, 2015, there is no liability of SB Cess.
(ii) In case payment has been received before the service became taxable and invoice is raised within 14 days from the date service is taxed first time, i.e. uptoNovember 29, 2015, even then the Service tax liability does not arise. In other words, SB Cess will be payable where service is provided on or after November 15, 2015 but payment is received prior to that date and invoice in respect of such service is not issued by November 29, 2015.
An illustrative table to above clarification is given as under:
S. No.
Date of applicability of SB Cess
Date of Invoice
Date of Payment Received
Applicability of SB Cess
15thNovember, 2015
25thNovember, 2015
1stNovember, 2015
15th November, 2015
30th November, 2015
1st November, 2015
15th November, 2015
1st November, 2015
1st November, 2015
15th November, 2015
16th November, 2015
16th November, 2015

Our Comments: Under the Finance Act, Section 66B of the Finance Act, 1994 is the charging Section which levy Service tax on taxable services. We are reproducing herewith Section 66B of the Finance Act for the ease of convenience:
“66B. Charge of service tax on and after Finance Act, 2012.
There shall be levied a tax (hereinafter referred to as the service tax) at the rate of twelve per cent. on the value of all services, other than those services specified in the negative list, provided or agreed to be provided in the taxable territory by one person to another and collected in such manner as may be prescribed.”
The literal interpretation of the charging Section 66B of the Finance Act means that the levy of Service tax is on the value ofall taxable services ‘provided or agreed to be provided’. However, the collection of Service tax may be shifted to any point/ stage/event, in any manner, as prescribed by the Rules made in this behalf.
The Hon’ble Supreme Court in the case of All India Federation of Tax Practitioners Vs. Union of India [2007-TIOL-149-SC-ST] held that “a tax on a thing or goods can only be with reference to a taxable event” and the same contention was upheld again in the case of Association of Leasing & Financial Service Companies Vs. Union of India [2010 (20) STR 417 (SC)], wherein the Hon’ble Supreme Court observed that the taxable event under the Service tax law is the rendition of service.
In view of the above discussed provisions, the matter is subjected to debate as to whether SB Cess would be leviable on a service rendered prior to November 15, 2015 when SB Cess was not applicable at the time of its rendition, merely because its payment is received on or after the date of levy or the invoice is not issued within 14 days of the date of levy.
Here it would not be out of place to mention that POT Rules were framed by the Central Government in exercise of the powers conferred under Section 94 of the Finance Act, 1994 and such delegated legislation cannot be extended to go beyond the vires of the Finance Act, 1994.
FAQs released by CBEC on SB Cess
The Board has issued Frequently Asked Questions (FAQs) on SB Cess wherein certain issues under SB Cess has been clarified like:
“Q.8 Whether separate accounting code will be there for Swachh Bharat Cess?
Ans. Yes, for payment of Swachh Bharat Cess, a separate accounting code would be notified shortly in consultation with the Principal Chief Controller of Accounts. These are as follows:-
Swachh Bharat Cess
(Minor Head)
Other Receipts

Q.14 Whether Cenvat Credit of the SBC is available?
Ans. SBC is not integrated in the Cenvat Credit Chain. Therefore, credit of SBC cannot be availed. Further, SBC cannot be paid by utilizing credit of any other duty or tax.”
To access complete FAQs, please click on the link below:
In order to access our earlier article on SB Cess, please click on the link below:
Hope the information will assist you in your Professional endeavours. In case of any query/ information, please do not hesitate to write back to us.
Thanks & Best Regards,                                                    
Bimal Jain
FCA, FCS, LLB, B.Com (Hons)
Author of a book on Goods and Services Tax, titled, "GOODS AND SERVICES TAX – INTRODUCTION AND WAY FORWARD" (1st Edition)
Tax and Law Practitioners
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Disclaimer: The contents of this document are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the authors nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this document nor for any actions taken in reliance thereon.

Readers are advised to consult the professional for understanding applicability of this newsletter in the respective scenarios. While due care has been taken in preparing this document, the existence of mistakes and omissions herein is not ruled out. No part of this document should be distributed or copied (except for personal, non-commercial use) without our written permission.
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CA Final and CA IPC November 2015 Exam dates.


NOTIFICATION                                                                  21 July, 2015 

No. 13-CA (EXAM)/N/2015: In pursuance of Regulation 22 of the Chartered Accountants Regulations, 1988, the Council of the Institute of Chartered Accountants of India is pleased to notify that the Intermediate (IPC) and Final examinations will be held on the dates given below at the following  places provided that sufficient number of candidates offer themselves to appear from each centre. 

Similarly, Examinations in Post Qualification Courses under Regulations 204, viz.: Management Accountancy Course (MAC) Part – I, Corporate Management Course (CMC) Part – I, Tax Management Course (TMC) Part – I, Insurance and Risk Management (IRM), and International Trade Laws and World Trade Organisation (ITL & WTO) examinations (which are open to the members of the Institute) will be held on the dates given below at the above places (centres in India only) provided that sufficient number of candidates offer themselves to appear from each of the above places. 

[As per syllabus contained in the scheme notified by the Council under Regulation 28 E (3) of the Chartered Accountants Regulations, 1988] 

Group-I: 2nd, 4th, 6th & 8th November 2015 
Group-II: 10th, 13th & 15th November 2015 
(Afternoon Session: 2.00 PM to 5.00 PM) (IST) 

[As per syllabus contained in the scheme notified by the Council under Regulation 31 (ii) of the Chartered Accountants Regulations, 1988.] 

Group -I: 1st, 3rd, 5th & 7th November 2015 
Group -II: 9th, 12th, 14th & 16th November 2015 
(Afternoon Session: 2.00 PM to 5.00 PM) (IST) 


Group-I: 9th & 12th November 2015 
Group-II: 14th & 16th November 2015 
(Afternoon Session: 2.00 PM to 5.00 PM) (IST) 


Modules I to IV 9th, 12th, 14th & 16th November 2015 
(Afternoon Session: 2.00 PM to 5.00 PM) (IST) 


Group A 2nd , 4th & 6th November 2015 
Group B 8th, 10th & 13th November 2015 
(Afternoon Session: 2.00 PM to 5.00 PM) (IST) 

For More details download the official notification

The Result of the CA IPC Examination held in May, 2015 is likely to be declared on Friday, the 31st July, 2015

The result of the Chartered Accountants Intermediate (Integrated Professional Competence) Examination held in May, 2015 is likely to be declared on Friday, the 31st July, 2015 around 4.00 P.M. and the same as well as the merit list (candidates securing a minimum of 55% and above marks and upto the maximum of 50th Rank on all India basis will be available on the following website: 


Arrangements have also been made for the students of Intermediate (IPC) Examination desirous of having results on their e-mail addresses to register their requests at the above website, i.e., http://www.caresults.nic.in from 27th July, 2015. All those registering their requests will be provided their results through e-mail on the e-mail addresses registered as above immediately after the declaration of the result. 

In addition to above, it may be noted that for accessing the result at the above website i.e. http://www.caresults.nic.in the candidate shall have to enter his registration no. or PIN no. alongwith his roll number. 

Further facilities have been made for candidates of Intermediate (IPC) Examination held in May, 2015 desirous of knowing their results with marks on SMS. The service will be available through India Times. 

For getting results through SMS candidates should type: 

CAINTER(Space)XXXXXX (where XXXXXX is the six digit Intermediate (IPC) Examination roll number of the candidate) 

e.g. CAINTER 302971 and send the message to 

58888 - for all mobile services - India Times


tags: CA IPC, ca ipcc, Results, ca ipc may 2015 result,

Electronic Verification Code can also be applied for AY 2013-14 and Ay 2014-15

CBDT has extended the time Limit for submission of ITR-V to CPC Bengaluru for A.Y 2013-14 and 2014-15 to 31.10.2015 vide notification no. 1/2015 dated 10.07.2015. 

In this regards CBDT has issued the order under sec 119(1) for electronically validating the return filed between 01.04.2015 to 31.03.2015.

Below is the notification:

F.No. 2251141/2015/ITA.II

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

North Block, New Delhi,

Dated- 20th of July, 2015

Order under section 119(1) of income-tax Act. 1961

Subject: Validation of tax-returns through Electronic Verification Code-reg.-

The Central Board of Direct Taxes has vide Notification No. 41/2015 dated 15.04.2015 in cases of categories of ‘persons’ specified therein, has introduced Electronic Verification Code (‘EVC’) as one of the modes for validation of return of income which are filed electronically on or after 01.04.2015.

2. In case of returns of income pertaining to Assessment Year’s 2013-2014 and 2014- 2015 filed electronically (without digital signature certificate) between 01.04.2014 to 31.03.2015, time-limit for submission of ITR-V to the CPC Bengaluru has already been extended till 31.10.2015 vide Notification No. 1/2015 dated 10.07.2015 issued by the Pr. DGIT(Systems), CBDT. In order to facilitate the process of validation of such returns, CBDT, in exercise of the powers conferred under sub-section (1) of section 119 of the Income-tax Act, 1961, hereby directs that the taxpayer can validate such returns of income within the said extended time through EVC also.

(Rohit Garg)

Deputy Secretary to the Government of India

Chartered Financial Analyst (CFA) – When Should You Pick Up This Course

Lot of students asks me the options available to them while they are doing CA or after completing CA.  And one of the most asked question is ‘should they go for a CFA degree’.  The reason of writing this article is not to tell you how to do CFA and what’s involved in it, but more about ‘Why CFA’.  You can very easily Google the subjects and the course curriculum, something where I may not be able to add any value.  However, what I want to elaborate through this article are the larger aspects of why should you pick this course and what are the skills one should have to complete it. 

After interacting with students and young chartered accountants, I felt a majority are perhaps clueless of why should they pursue this course.  The reason of starting my blog www.nimishgoel.com was precisely this reason.  It is unfortunate students have limited means to take guidance and mentorship from someone who is capable enough to guide in the right direction.  Senior most family members, who may not have any idea about the field you want to pursue, generally provide guidance.  Because they are our elders in the family and probably more educated (irrespective of the field), they end up becoming the mentors to all the youngsters in the family. You can read one of my previous articles on this topic http://nimishgoel.com/deal-unwanted-career-advice-family-friends/

Ok, coming back to the topic – Why CFA?  It is important to understand the objective of this course and how it is structured.  If we look at CFA’s website and read the preamble of the course, it says as follows:

“The CFA Program curriculum covers concepts and skills you will use at all stages of your career, connecting academic theory with current practice and ethical and professional standards to provide a strong foundation of advanced investment analysis and real-world portfolio management skills”

If we carefully look at the underlined words, we should be able to identify the philosophy behind launching the CFA course.  It is quite evident by undergoing this course you would acquire skills that are required for investment analysis and portfolio management. 

Before I discuss a little more on the finer aspects of CFA, it would be worthwhile to see what are the jobs typically done by CFA’s.  A research by eFinancialCareers found more than 25% of CFAs work in Asset Management industry followed by 25% in Equities and Fixed Income & Research, 20% in Hedge Funds, 15% in M&As, 10-15% in Capital Markets, 10% in Private Banking and Risk Management, 10% in Trading and Commodities and roughly 7-10% in accounting and finance.    

By looking at the industries employing CFAs, it is evident the jobs are more in the field related to corporate finance, treasury, hedging, risk management and capital markets.  And this seems to be in line with the Preamble of the CFA Institute making professionals in the field of investment analysis and portfolio management.

Lets try and understand in simple layman language, what does the above terms mean and how CFA degree holders add value to these fields:

Investment Analysis

Investment analysis is basically the study of how an investment is likely to perform and how suitable it is for a given investor.  If someone wants to invest in equities or mutual funds, the investment manager is the person who identifies which sector is promising to invest, which equity has performed well in the past and basis the decisions taken in the past and historical performance, takes the decision to make an investment.

To simply put, it is like if you want to put your money in buying a house you invest time to study the area, study the background of the builder, study the market prices and also study the earning potential in case you wish to sell it in the future.  This is exactly what an investment manager does whilst deciding where to put your money whilst buying securities or mutual funds.

Portfolio Management 

Portfolio management is helping create and recommend portfolios of stocks, bonds, mutual funds, exchange-traded funds or alternative investments to meet the investment objectives of a specific investor.  Professionals who perform portfolio management are focused on meeting the needs of investors through the rate of return achieved within a portfolio and they are often responsible for rebalancing the account to remain in line with the investor's allocation preferences.

The terms ‘investment analysis’ and ‘portfolio management’ are kind of synonymous, both of them leading the objective of ensuring investor’s objectives aligned with the type of investments they invest in.

The other areas where CFAs generally work include the following:

1.             Working as a Buy-side analyst.  The Buy-side of a stock exchange comprises the mutual funds, pension funds, insurance companies that buys a large proportion of securities (shares, bonds etc) for money-management purposes.

A buy side analyst is a person who works internally for company’s investment analysts and provides information and does research for the company’s internal consumption.  The buy-side analyst’s work is not shared with in the public domain.

2.             Working as a Sell-side analyst.  A Sell-side analyst is a person whose work is shared in the public domain and he/she generally works in a brokerage firm and provides recommendations for purchase, sale, prices and opinions to the public market.

3.             Working as a Financial Planner.  The other areas where CFAs are found quite useful is the field of financial planning.  Financial planners help companies and individuals plan their finances keeping the short term and log term goals in mind including retirement benefits, children’s education and marriage etc.  They are the people who have skills to foresee which investment is fruitful keeping the objectives in mind.   

4.             Working as Economists.  CFAs are also quite good in the field of economics and that’s because as part of the curriculum they are taught the concepts of statistics, probability theory, time value of money, micro and macroeconomics, international economics etc.   

How Does CFA differ From CA?

I think by now you yourself would have identified what a CFA does and the kind of industries they work in.  If we look at a macro level, CFA degree helps you get expertise in areas of investment analysis, portfolio management, economic theory, financial reporting, corporate finance that includes capital investment decisions, capital structure policy, dividend policy and the economic aspects of mergers and acquisitions.  A CFA is generally expected to have sound knowledge of ‘Finance’ in the broader sense.  Leveraging statistical tools and economics based tools, the CFAs provide their services. 

A Chartered Accountant, on the other hand is expected to have sound knowledge of accounting, audit, taxation (both direct as well as indirect) and law.  Though, in the CA course there are papers on financial management and a lot of CAs do practice in the field of corporate finance, in my personal opinion the quantum of financial management and economics oriented subjects in these courses vary, with CFA having much larger pie of these subjects than CA.  Similarly, even the perception of both the degrees to the outside world is different.

When Should You Do CFA?  Should you do CFA after CA?

In my opinion before deciding to choose a professional qualification, you should ask yourself the following questions:

1.             Do I have strong analytical skills;
2.             Am I good in research;
3.             Does my patience exceeds normal patience levels;
4.             Do I enjoy reading the pages in Economic Times/Financial Express/Business Line that cover reports and analysis on stock market, foreign currency and India and world economy;
5.             Do I like watching news on NDTV Profit, CNBC TV18 on issues related to economy, stock market, financial products, derivatives, equities and bonds and how are they valued etc; and
6.             Do I have the habit for an attention to details.

So, if your interest is more in capital markets, financial management, forex, derivatives, hedging and you have a knack to do research oriented work, CFA might be a good career option to you.  Students of economics wanting to make a career in corporate finance do well in CFA.  I personally think if you enjoy reading about stock exchange, derivatives, policies related to exchange money control and foreign exchange and the subject economics and world around it excites you, CFA probably would be a good bet for you to try as a career option.

But, having said that it doesn’t mean that people who don’t like reading economics or who have not been students of economics can’t do CFA, they surely can if they develop that interest.

However, if you (like me J) have more interest in reading balance sheets, picking up issues on taxation, understanding how accounting entries are passed for complex transactions, know how to interpret legal provisions and enjoy auditing the past transactions, then making a move towards CA might be a good option. 

Doing CFA after completing CA in my opinion is a good option provided you have interest in capital markets and related fields.  Your knowledge of financial management in CA exams will surely help but then don’t expect yourself doing the same kind of work that your CA friend might be doing, post qualification.

It is critical to understand in minutest of the details how each course/degree unfolds its career options and if you take a decision without being clear in the objectives, the results may be damaging and catastrophic. 

Don’t play with your career.  Do your research well and take informed decisions without anyone’s compulsions and pressure.  After all, it’s your life and only you have the right to make it right.

Good luck and stay blessed…

Authored by Nimish Goel who by profession is a qualified chartered accountant but by passion, is an active blogger.  Nimish has worked with EY and PwC in India and has also worked with KPMG in Europe.  He now runs his own consulting company (International Business Advisors) and manages his blog www.nimishgoel.com.

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