Krishi Kalyan Cess @ 0.5% on all taxable providers

Arun Jaitley whereas saying the Funds 2016 has launched a brand new cess which might be levied @ 0.5% on the worth of all taxable providers. This is able to be levied @ 0.5% and could be levied over and the above the Service Tax and the Swachh Bharat Cess.

The Krishi Kalyan Cess has been levied for the aim of financing and selling initiatives to enhance agriculture and could be relevant from 1st June 2016.

What’s Krishi Kalyan Cess?

Similar to Swachh Bharat Cess has been levied for cleanliness, equally Krishi Kalyan Cess has been launched for bettering agricultural amenities.

A Cess is mainly a Tax that’s collected by the federal government for use for a selected objective. The collections from levy of cess can be utilized just for the aim for which it has been collected and never for another objective. Within the case of Krishi Kalyan Cess, the quantity collected by this cess can solely be used for the aim of bettering the Agricultural amenities.

The Krishi Kalyan Cess shouldn’t be levied in your Earnings however could be levied on all Providers on which Service Tax is levied. Subsequently, from 1st June, the efficient price of service tax could be 15% i.e.

Particulars Quantity
Service Tax 14%
Swachh Bharat Cess 0.5%
Krishi Kalyan Cess 0.5%
Complete 15%

This new Krishi Kalyan Cess could be relevant on all of your Funds for Providers like like Phone Invoice, Web Invoice, Lease Cost, Restaurant Invoice Cost, Under Construction Property, Air Travel Agent, Digital Ads,  and many others. It’s to be famous that the Service Supplier can not merely point out 15% Tax on the Bill and he could be required to say the break up of the Bill.

Krishi Kalyan Cess for Providers supplied earlier than 1st June

Krishi Kalyan Cess is relevant from 1st June 2016. In instances the place the providers have been supplied after 1st June and the fee acquired after 1st June – Krishi Kalyan Tax could be relevant in all such instances.

Nonetheless, in some instances – it could be relevant for providers supplied earlier than 1st June as effectively. The next chart explains the instances on which the Krishi Kalyan Cess could be relevant and the instances through which the Krishi Kalyan Cess wont be relevant

Case 1: Service is supplied earlier than 1st June, Bill is raised and fee acquired earlier than 1st June – Krishi Kalyan Cess wouldn’t be relevant and complete tax relevant could be 14.50%.

Case 2: Service is supplied earlier than 1st June, Bill is raised after 1st June however the fee acquired earlier than 1st  June – Krishi Kalyan Cess wouldn’t be relevant and complete tax relevant could be 14.50%

It’s to be famous right here that if the Bill shouldn’t be raised inside 14 days of receipt of fee, Krishi Kalyan Cess could be relevant and the overall tax relevant in such a case could be 15%.

Case 3: Service is supplied earlier than 1st June, Bill is raised earlier than 1st June however the fee acquired after 1st  June – Krishi Kalyan Cess wouldn’t be relevant and complete tax relevant could be 14.50%. (Supply: Official Notification by Ministry of Finance)

Case 4: Service is supplied earlier than 1st June, Bill is raised earlier than 1st June however the fee acquired after 1st  June – Krishi Kalyan Cess could be relevant and complete tax relevant could be 15%.

Imp Word: In case of half fee acquired or half bill issued – every of the above case could be individually relevant. Subsequently for half fee acquired earlier than 1st June – Krishi Kalyan Cess wouldn’t be relevant and for fee acquired after 1st June – Krishi Kalyan Cess could be relevant.

Different Related Factors relating to Krishi Kalyan Cess

  1. Krishi Kalyan Cess needs to be levied and picked up @ 0.5% in accordance with the provisions of Chapter VI. This cess could be levied @ 0.5% on the overall worth of providers for the aim of financing and selling initiatives to enhance agriculture.
  2. The proceeds of the Krishi Kalyan Cess shall first be credited to the Consolidated Fund of India and the Central Govt after due appropriation made by Parliament in legislation on this behalf, utilise such sums of cash of the Krishi Kalyan Cess for the aim specified above.
  3. The provisions of Chapter V of the Finance Act 1994 and the foundations made thereunder together with these regarding refunds and exemptions from tax, curiosity and penalty shall, so far as could also be, apply in relation to the levy and assortment of the Krishi Kalyan Cess on taxable providers, as they apply in relation to the levy and assortment of tax on such taxable providers.
  4. Enter Credit score of Krishi Kalyan Cess could be allowed to be claimed in opposition to Krishi Kalyan Cess. Nonetheless, it’s to be famous that enter credit score of Swachh Bharat Cess shouldn’t be allowed to be claimed.

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