All About Krishi Kalyan Cess on Services

Finance Minister Mr. Arun Jaitley introduced Krishi Kalyan Cess on the budget 2016 which is levied on the value of taxable services at 0.5%. This Krishi Kalyan Cess would be levied over and above the Service tax and the Swachh Bharat Cess.

Krishi Kalyan Cess motive is to improve agriculture with new initiative and technology and KKC is applicable from 1 June 2016.

Meaning of Cess and Krishi Kalyan Cess

A Cess is a type of tax government levy on the tax rate which is used for some specific purpose. Cess amount which government collects can be used only for that specific purpose and not any other purpose.

Krishi Kalyan Cess only levy on service tax and not income tax. It means rate of service tax which was 14.5 %( 14%+0.5% Swachh Bharat Cess) is now 15 %( 14%+0.5 %( SBC) +0.5 %( KKC)).

Krishi Kalyan Cess is applicable on all the services which attract service tax like 
Telephone Bill
Restaurant Bill
Air Travel Agent
Advertisements
Rent Payment etc.

Service provider cannot mention the rate of service tax at 15%. He needs to break up the structure of service tax and Cess like
Service tax -14%
Swachh Bharat Cess- 0.5%
Krishi Kalyan Cess- 0.5%


Krishi Kalyan Cess Applicability

Krishi Kalyan Cess is applicable from 1 June 2016 on all the services which attract service tax. However, if service provided before 1 June 2016 and payment collects on or after 1 June 2016, Krishi Kalyan Cess would be leviable.

In case of part payment received, the part of payment received before 1 June 2016 doesn’t attract Krishi Kalyan Cess and the part which received on or after June 1, 2016 will attract Krishi Kalyan Cess.
S.No.
 Krishi Kalyan Cess    (Minor Head)  
Tax Collection
 Other Reciepts  (Interest)
Deduct Refunds
Penalties
1
0044-00-507
00441509
00441510
00441511
00441512

Other important points regarding Krishi Kalyan Cess.

1-Service providers can take CENVAT CREDIT of Krishi Kalyan Cess. But Input KKC can only be utilized for the payment of Krishi Kalyan Cess. However No CENVAT CREDIT is allowed in case of Swachh Bharat Cess.

2-Krishi Kalyan Cess is only chargeable on the services chargeable to service tax and not on services exempt from service tax.

3-For the service covered under abatement, Krishi Kalyan Cess will apply on the specific percentage of taxable value.

4-Exporters can avail rebate benefit of Krishi Kalyan Cess.

5-SEZ units or developers can avail ab-initio exemption/refund in respect of Krishi Kalyan Cess.

6-Krishi Kalyan Cess collection code is 00441509
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About Nitin Aggarwal

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6 comments:

  1. Modi is all set to take his foreign expenses from hard working people. We work hard and pay our earnings to this murderer

    ReplyDelete
  2. Modi is all set to take his foreign expenses from hard working people. We work hard and pay our earnings to this murderer

    ReplyDelete
  3. This will be followed by "BBC" or "Beti Bachao Cess" 0.5%,then "PBC" or "PM BACHAO CESS" another 0.5% and finally "DBC" or "DESH BACHO CESS" @0.5%

    ReplyDelete
  4. Dear sirs,

    If we are having Transport bills(GTA Applicable)the service is given and bill raised before Jun2016 and payment is taken place in the month of Jun-2016.
    If we have to pay the KKC or Not.

    ReplyDelete
  5. Dear Sirs,

    Can we avail the KKC credit under RCM as we are manufacturer and providing only
    renting of immovable services.

    ReplyDelete