Krishi Kalyan Cess (KKC)-All you need to know
Posted on: 03/May/2016 9:25:16 AM
Krishi Kalyan Cess (KKC) shall be applicable on All services provided w.e.f. 1.6.2016. The Following are the points to be noted in this regard -
1. Legal Basis for Levy - It is a Cess which shall be levied and collected in accordance with the provisions of Chapter VI of the Finance Act, 2016,called Krishi Kalyan Cess, as service tax on any or all of taxable services
2. Rate and Value on which it is applicable - It is levied at the rate of 0.5% of the value of taxable service.
3. Effective Rate of Service Tax post levy of KKC - Post Levy of KKC the rate of Service Tax shall be as follows -
4. Availability of CENVAT Credit on KKC - CENVAT Credit of KKC has been allowed in the hands of Output Service Provider. KKC shall be set off only against KKC. Further no other credit can be set off against KKC
5. Effective Date of Levy - The Central Government has appointed 1st day of June, 2016 as the date from which provisions of Krishi Kalyan Cess will come into effect.
6. Applicability of Exemptions / Abatements: - Abatements and Exemptions under Service Tax shall apply to KKC as they apply to Service Tax and SBC.
7. Reverse Charge: Further KKC would also be applicable on Service Tax paid on Reverse Charge Services like GTA Service, Import of Service etc.
8. Accounting Codes:
1. Legal Basis for Levy - It is a Cess which shall be levied and collected in accordance with the provisions of Chapter VI of the Finance Act, 2016,called Krishi Kalyan Cess, as service tax on any or all of taxable services
2. Rate and Value on which it is applicable - It is levied at the rate of 0.5% of the value of taxable service.
3. Effective Rate of Service Tax post levy of KKC - Post Levy of KKC the rate of Service Tax shall be as follows -
Name of Levy | Rate | Cenvatable |
1. Service Tax - Basic Rate (ST) | 14% | Yes |
2. Swachh Bharath Cess (SBC) | 0.5% | No |
3. Krishi Kalyan Cess (KKC) | 0.5% | Yes |
Total | 15% |
|
4. Availability of CENVAT Credit on KKC - CENVAT Credit of KKC has been allowed in the hands of Output Service Provider. KKC shall be set off only against KKC. Further no other credit can be set off against KKC
5. Effective Date of Levy - The Central Government has appointed 1st day of June, 2016 as the date from which provisions of Krishi Kalyan Cess will come into effect.
6. Applicability of Exemptions / Abatements: - Abatements and Exemptions under Service Tax shall apply to KKC as they apply to Service Tax and SBC.
7. Reverse Charge: Further KKC would also be applicable on Service Tax paid on Reverse Charge Services like GTA Service, Import of Service etc.
8. Accounting Codes:
Krishi Kalyan Cess (Minor Head) | Tax Collection | Other Receipts | Deduct Refunds | Penalties |
0044-00-507 | 00441509 | 00441510 | 00441511 | 00441512 |
9. Whether KKC would be required to be mentioned separately in invoice?
KKC may be charged separately after service tax as a different line item in invoice. This needs to be charged separately on the invoice, accounted for separately in the books of account and paid separately under separate accounting code as above.
KKC may be charged separately after service tax as a different line item in invoice. This needs to be charged separately on the invoice, accounted for separately in the books of account and paid separately under separate accounting code as above.
CA T.R.Srinivasan
Shree Guru Kripa’s Institute of Management
Ph.No.: 97899 76079
Mail ID: trs.connects@gmail.com
