krishi kalyan cess
Finance minister ,Mr. arun jaitley had proposed to impose a cess ,called the krishi kalyan cess(kkc) at 0.5% on all taxable service during budget 2016.Effective date of krishi kalyan cess is 1st june 2016 .Hence, after levy of KKC, Service tax rate will increase from 14.5% to 15%, effective from June 1, 2016.An illustration showing levy of Service tax and Swachh Bharat Cess (“SB Cess”).
what is the cese?
a cess is a tax that is levied by the government to raise fund for specific purpose. In india there are couple of cesses like infrastructure cess,higher education cess,swachh bharat mission or clean india mission cess etc. As per Article 270 of the constitution ,cesses imposed by the parliament for earnmarked purposes need not be shared with state government.if there is an unspent amount,it is the simply carried forward for the use in the following year.while the centre has to manditory share the revenue from other taxes with the state.
what is the krishi kalyan cess?
Krishi Kalyan Cess is a levy/tax imposed by the Union Government on all services, which are liable to service tax. The rate of 0.5% for financing improvement of agriculture and welfare of farmers. (‘Krishi’ means ‘farming’ and ‘Kalyan’ means ‘welfare’ in Hindi). A tax of 0.5% translates into a tax of 50 paisa on every one hundred rupees worth of taxable services. This cess is levied in addition to any cess or Service Tax levied at present, like, Swachh Bharat Cess.KKC comes into effect from 1 June 2016. Input tax credit of this cess is available upon payment of this cess.KKC has been subsumed into the Goods and Service Tax, when the latter got introduced on 1 July 2017.
krishi kalyan surchage
Krishi Kalyan Cess is different from the Krishi Kalyan Surcharge which is announced by the Government in the same Union Budget, 2016-17. In order to provide a stable and predictable taxation regime and reduce black money, it was announced in the budget that domestic tax payers can declare undisclosed income or such income represented in the form of any asset by paying tax at 30%, and surcharge (means an addition to the existing tax) at 7.5% and penalty at 7.5%, which is a total of 45% of the undisclosed income. Such declarants will have immunity from prosecution.The Finance Minister while declaring the above provision mentioned that Surcharge levied at 7.5% of the undisclosed income will be called as Krishi Kalyan Surcharge, to be used for agriculture and rural economy.