The Hon’ble Finance Minister Mr. Arun Jaitley announces a new Cess, Krishi Kalyan Cess at the rate of 0.5% on all taxable services while presenting the third full-year Budget of the current government on February 29, 2016. The Krishi Kalyan Cess has been introduced for the purpose of financing to improve agriculture activities and welfare of farmers and the effective date of Krishi Kalyan Cess would be 1st June 2016.
Key facts to know about Krishi Kalyan Cess:
1. Krishi Kalyan Cess would be levied at the rate of 0.5% on the cumulative amount of services, according to the provisions of Chapter VI. and the collected cess will be exercised for farmer’s welfare to give them financial support to improve agriculture.
2. The Krishi Kalyan Cess is the addition 0.5% apart from the 14% of Service Tax and 0.5 % of Swachh Bharat Cess that would be levied on all taxable services.
3. All the collected amount from the Krishi Kalyan Cess firstly go into the Consolidated Fund of India and then Central Govt will use the amount for the purpose specified for Cess collection.
4. The rules and provision of Chapter V of the Finance Act 1994, those belong to the refunds, interest, penalty and exemptions from taxes that apply on levy and collection of such taxable services, also may applicable on to the collection of Krishi Kalyan Cess on all taxable services.
