Tag Archives: Krishi Kalyan Cess

In view of the exemption notification issued by the Central Government, no Krishi Kalyan Cess (KKC) has been applicable on service completed on or before May 31, 2016, and invoices for such service issued on or before May 31, 2016. KKC was introduced vide Section 161 of Financial Act, 2016 @ 0.5% on the value of all or any taxable services. Central Government by way of a notification dated June 23 has exempted taxable services with respect to which the invoice for the service has been issued on or before  May 31, 2016, from the whole of Krishi Kalyan Cess leviable thereon, subject to condition that the provision of service has been completed on or before the May 31.

A new tax called Krishi Kalyan Cess (KKC) will be levied at 0.5% on all taxable value of services with effect from June 1, 2016. Just like Swachh Bharat Cess (SBC), KKC shall be chargeable on the value of services and not on service tax. This means that along with 0.5% of KKC the effective service tax rate will become 15% on taxable service. The Krishi Kalyan Cess will not be leviable on services which are exempt from levy of Service tax as well as on services on which service tax is not leviable. In case there is any abatement or partial exemption available to a service, KKC shall be leviable on such amount which is arrived after deduction of said abatement or partial exemption. Service tax, SBC and KKC will have to be shown separately on the invoice. Separate accounting codes for payment of KKC will be released The central government seeks to levy and recover KKC @0.5% on value of outstanding amounts as on June 1, 2016. TAAI has advised all its members to collect their outstanding dues from their clients at the earliest and latest by May 31, 2016 to avoid recovery of additional 0.5% of KKC.