KRISHI KALYAN CESS – SIMPLIFIED APPROACH TO SERVICE TAX- CHAPTER VI OF FINANCE ACT’ 2016
“152. I propose to impose a Cess, called the Krishi Kalyan Cess, @ 0.5% on all taxable services, proceeds of which would be exclusively used for financing initiatives relating to improvement of agriculture and welfare of farmers. The Cess will come into force with effect from 1st June 2016. Input Tax credit of this cess will be available for payment of this cess.”
Date of Applicability
(1) This Chapter shall come into force on the 1st day of June, 2016.
Applicability on Taxable Services
(2) There shall be levied and collected in accordance with the provisions of this Chapter, a cess to be called the Krishi Kalyan Cess, as service tax on all or any of the taxable services @ 0.5% on the Value of such services for the purposes of financing and promoting initiatives to improve agriculture or for any other purpose relating thereto.
Krishi Kalyan Cess to be in addition to any cess or service tax leviable:
(3) The Krishi Kalyan Cess leviable under sub-section (2) shall be in addition to any cess or service tax leviable on such taxable services under Chapter V of the Finance Act, 1994, or under any other law for the time being in force.
Utilization of Krishi Kalyan Cess
(4) The proceeds of the Krishi Kalyan Cess levied under sub-section (2) shall first be credited to the Consolidated Fund of India and the Central Government may, after due appropriation made by Parliament by law in this behalf, utilise such sums of money of the Krishi Kalyan Cess for such purposes specified in sub-section (2), as it may consider necessary.
Applicability of Provisions of Chapter V of the Finance Act, 1994
(5) The provisions of Chapter V of the Finance Act, 1994 and the rules made thereunder, including those relating to refunds and exemptions from tax, interest and imposition of penalty shall, as far as may be, apply in relation to the levy and collection of the Krishi Kalyan Cess on taxable services, as they apply in relation to the levy and collection of tax on such taxable services under the said Chapter or the rules made thereunder, as the case may be.
RELATED POINTS TO NOTE
Following associated points need to be noted:-
Stay Tuned. We’ll keep you updated.
(CA Raman Singla, Partner – Indirect Tax , Devalya Advisory LLP, Mob: +91 9899834353, Mail: firstname.lastname@example.org)