Now Service Tax Rate is 15% with addition of Krishi Kalyan Cess from 1st June

The Budget 2016 has introduced a new cess named as Krishi Kalyan Cess, which is applicable from June 1, 2016 at the rate of 0.5% on all the taxable services. With the imposition of this cess, the new effective Service Tax would henceforth be 15%.

With the addition of KKC, all DTH, credit and debit cards, courier, healthcare, banking, professional consultancies and charges on restaurant food bills would become costlier. The purpose of initiating the Krishi Kalyan Cess is for improving the agriculture scenario.

In brief, Krishi Kalyan Cess is a tax, which the government is going to collect for some specific purpose. Hence, the collections would be there only for this specific motive and not for any other purpose. The cess is similar to the Swachh Bharat Cess, which has been levied for the cleanliness.

It is going to be charged for all the services on which the Service Tax has been levied. From 1st June onwards, the effective rate of service tax would be 15%. Service Tax would be imposed @ 14%, Swachh Bharat Cess @ 0.5%, and Krishi Kalyan Cess @ 0.5%, which sum up to a total of 15%. Before June 1, the applicable tax rate was 14.5%.

Some Prominent Facts About Krishi Kalyan Cess

1.) The tax will be collected as per the provisions of chapter VI and should be levied @ 0.5%. Total value of services that are for the purpose of financing and promoting the agricultural scenario would be considered under this.

2.) The Consolidated Fund of India is going to credit the revenues first and then they are added to the account of Central Govt. after due appropriation made by Parliament in law in this behalf. The fund would be utilized for the Krishi Kalyan Cess for the aforementioned specified purpose.

3.) In case of Krishi Kalyan Cess, the input credit amount of the cess is to be claimed against the Krishi Kalyan Cess, whereas the case of Swachh Bharat Cess doesn’t allow the input credit to be credited.

SAG Infotech

All posts have been written by the research and best practices. We are not responsible for any confusion. We always try to give best information to the readers.

View Comments

Recent Posts

No GST Returns Will Be Accepted If Filed More Than 3 Years Past Their Due Date

An advisory has been released by the Goods and Services Tax Network (GSTN) which notifies…

14 hours ago

Delhi HC: Two Judgment Orders Against One SCN Cannot Be Accepted for the Same Period

It was cited by the Delhi HC that the two adjudication orders against one SCN…

16 hours ago

CBDT Allows Electronic Filing of Forms 3CEDA and 3C-O Via Notification No. 5/2024

The Central Board of Direct Taxes (CBDT) in an update for the taxpayers via the…

17 hours ago

October 2024 Records the 2nd Highest GST Collection, Driven by Domestic Sales

In October, Gross GST collection surged to 9% to Rs 1.87 lakh crore, the second…

19 hours ago

UP AAR: GST Will Be Levied on the Installation of Electricity Distribution Systems by DISCOMs

Goods and Services Tax (GST) is to get paid on the procurement of materials and…

2 days ago

Bombay HC Quashes Rejection Order for Voluntary GST Cancellation Due to Lack of Stated Reasons

The Bombay High Court carried that as the revocation orders for the registration cancellation on…

3 days ago