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Krishi Kalyan Cess and it’s rate

Krishi Kalyan Cess and it’s rate
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A new cess has been introduced in the Budget of 2016  for the development of Agriculture sector and utilized for the welfare of farmers in India called Krishi Kalyan cess ,apart from Swachh Bharath Cess. The rate of Krishi Kalyan cess is decided to be levied 0.5% on all taxable services.

Highlights of Krishi Kalyan Cess

  • Krishi Kalyan Cess will come into effect from 1st june 2016
  • Krishi kalyan cess is implemented on the basis of Chapter VI: Service Tax Voluntary Compliance Encouragement Scheme, 2013.
  • Cess would be levied on the total value of service provided
  • The Tax should be collected as  Service tax + Swachh Bharath Cess + Krishi Kalyan Cess
  • Input tax credit will be available , hence the effective rate would be lower than 0.5 % when availing credit.
  • Pay the cess only on the value addition at the time of sale of the product.
  • Cess will be prescribed  separate account code and charged separately in service invoices.
  • It is likely that the cenvat credit on service tax cannot be utilized for the payment of Krishi kalyan cess and reverse.

Krishi Kalyan cess Accounting Codes

The Accounting codes has been announced for the deposit  KKC as follows.

Krishi Kalyan Cess (Minor Head) Tax Collection Other Reciepts (Interest) Deduct Refunds Penalties
0044-00-507 00441509 00441510 00441511 00441512

 

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