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Central Government, hereby exempts taxable services with respect to which the invoice for the service has been issued on or before the 31st May, 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 31st May, 2016.
(i) Where a taxable service is exempt under any notification / special order or Service Tax is otherwise not payable, such service shall be exempt from levy of whole of KKC. (ii) KKC shall be leviable only on that portion / percentage of taxable service which is subject to Service Tax after availing abatement under Notification No. 26/2012-ST dated 20.06.2012. (iii) Value of taxable services for the purpose of KKC shall be determined as per Service Tax (Determination of value) Rules, 2016.
Krishi Kalyan Cess (herein after referred to as KKC) is a cess on taxable services, at the rate of 0.5% of the value of such taxable services. The cess is 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.
KKC IS APPLICABLE ON SERVICE PROVIDER AND NOT ON SERVICE RECIPIENT FOR THE SERVICES PROVIDED UPTO 31.05.2016 KKC (Krishi Kalyan Cess) is applicable on all services w.e.f. 01.06.2016. After introduction of KKC now effective rate of Service Tax will be 15% on all the services. The purpose of KKC is financing and promoting initiative to […]
In this article we have compiled Generic Service Tax Rate Applicable on all Taxable Services, Service Tax on Non Taxable Services , Wholly Exempted Services, Rate of Service Tax post 01.06.2016 in case of Abated services, Effective Rate of Service Tax post 01.06.2016 in case of Valuation , Rate of services where alternate rate is provided post 01.06.2016 and Effective Rate of services in case of reverse charge post 01.06.2016
As we all know that the Finance Minister of India, Mr. Arun Jaitley had proposed a new cess i.e. Krishi Kalyan Cess @ 0.50% in budget 2016 on all taxable services for the purposes of financing and promoting initiatives to improve agriculture or for any other purpose relating thereto.
As the effective rate of tax on services is to be increased from 14.5% (14% Service Tax + 0.5% SBC + 0.5% KKC) to 15% (14% Service Tax + 0.5% SBC + 0.5% KKC) w.e.f June 1, 2016 the applicable rates in different scenarios in case of existing taxable services are as under:
Hence, after levy of Krishi Kalyan Cess (KKC), Service tax rate will increase from 14.5% to 15%, effective from June 1, 2016. In this regard, there are many queries, which require clarification. We have summarized these queries through Frequently Asked Questions (FAQs) enumerated below.
The enabling provisions for KRISHI KALYAN CESS (KKC) are contained in Chapter – VI of Finance Act’ 2016. As per the provisions, KKC shall be applicable at 0.5% on all taxable services and the proceeds of KKC would be exclusively used for financing initiatives relating to improvement of agriculture and welfare of farmers. The Cess […]
Relevant Rules to understand the implication of new levy: i. Rule 4 of Point of Taxation Rules, 2011 (POTR, 2011) – Change in Effective Tax Rate, ii. Rule 5 of POTR, 2011 – Service Taxed for the first time iii. Notification No. 10/2016-ST dated 01st March, 2016 (insertion of explanation in Rule 5)
