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 cese?
The 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 krishi kalyan cess?
‘Krishi Kalyan Cess is a levy / tax on all services that are subject to service tax by the Union Government. The rate of 0.5% for the financing of improved farming and farmers welfare. Krishi is derived from two word krishi means ‘farming’ and ‘Kalyan’ means ‘welfare’ (in Hindi).A tax of 0.5 percent means a tax of 50 paisa per hundred rupees 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 announced in the Union budget 2016 – 17 by the government.In order to establish a stable and predictable tax system and reduce black money, it was announced in the budget that domestic taxpayers can declare undisclosed income or income in the form of any asset by paying a 30 percent tax and a 7.5 percent surcharge( meaning an addition to the existing tax) and a 7.5 percent penalty, which amounts to a total of 45 percent of the undisclosed tax. Such declarations 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.Krishi kalyan surchage wiil to be used for improvement of farming and rural economy.