Krishi Kalyan Cess @ 0.5% on all taxable Services

Arun Jaitley while announcing the Budget 2016 has introduced a Krishi Kalyan Cess which would be levied @ 0.5% on the value of all taxable services and would be levied @ 0.5% of the total value of service. This would be levied @0.5% and would be levied over and the above the Service Tax and the Swachh Bharat Cess.

The Krishi Kalyan Cess has been levied for the purpose of financing and promoting initiatives to improve agriculture and would be applicable from 1st June 2016

• An enabling provision is being made to empower the Central Government to impose a Krishi Kalyan Cess on any or all the taxable services at a rate of 0.5% on the value of any or all taxable services for the purpose of financing and promoting initiatives to improve agriculture.

• The proceeds from this Cess would be utilized for the purposes of financing and promoting initiatives to improve agriculture or for any other purpose relating thereto.

• Credit of Krishi Kalyan Cess shall be allowed after due amendment yet to be made in the Cenvat Credit Rules, 2004 to be used for payment of the proposed Cess on the service provided by a service provider.

• The proceeds of the Krishi Kalyan Cess shall first be credited to the Consolidated Fund of India and the Central Govt after due appropriation made by Parliament in law in this behalf, utilize such sums of money of the Krishi Kalyan Cess for the purpose specified above.

• 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.

 

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Rajesh is a Founder and MD of Adroit Corporation Pvt Ltd, Rajkot. His area of expertise is a Income Tax, VAT, Service Tax and Financial Planning. Apart from his passion for Project Finance, he also holds an avid interest in Reading, Technology & Politics.

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