Krishi Kalyan Cess – Rate & Effective Date of Levy of KKC

Krishi Kalyan Cess

The Central Government of India coined a tax by way of Krishi Kalyan Cess (KKC) to uplift the condition and welfare of farmers  of India .

The levy of Krishi Kalyan Cess (KKC) has ultimately increased service tax rate to 15% .

Rate & Effective Date

There shall be a levy of KKC at the rate of  0.5%.

It shall be effective from 1st June 2016.

Levy Of KKC 

It is pertinent to note that the levy of KKC shall be on the value of taxable service .

Relevant Provision For KKC

The provisions for such a levy is provided under Chapter – VI of Finance Act’ 2016.

161 (1) This Chapter shall come into force on the 1st day of June, 2016.

(2) There shall be levied and collected in accordance with the provisions of this Chapter, a cess to be called the Krishi Kalyan Cess, as service tax on all or any of the taxable services at the rate of 0.5 per cent. on the value of such services for the purposes of financing and promoting  initiatives to improve agriculture or for any other purpose relating thereto.

(3)The Krishi Kalyan Cess leviable under sub-section (2) shall be 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.

(4)The proceeds of the Krishi Kalyan Cess levied under sub-section (2) shall first be credited to the Consolidated Fund of India and the Central Government may, after due appropriation made by Parliament by law in this behalf, utilise such sums of money of the Krishi Kalyan Cess for such purposes specified in sub-section (2), as it may consider necessary.

(5)The provisions of Chapter V of the Finance Act, 1994 and the rules made there under, 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 under the said Chapter or the rules made thereunder, as the case may be.” 

 On persual of the same , the underlined expressions need to be referred and understood in its proper perspective before jumping on any conclusion .

Please continue reading on Cenvat Credit of KKC by clicking here .