Service Tax - Krishi Kalyan Cess - On All Taxable Services - Notifications Issued
THE CBEC seems to have decided that Krishi Kalyan Cess is to be collected on all services.
Section 161(2) of the Finance Act 2016, stipulates,
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 .
If I provide five services, should I pay KKC on all the five services or any of the five services and who will decide that? The Act does not specify as to who will decide whether the cess is on all services or any of the services.
For now, CBEC seems to have decided that it has the power to decide this and so has decided that the cess will be on all services. Board has issued several notifications relating to KKC.
CENVAT Credit Rules Amended : - Notification No. 28/2016-Central Excise (N.T.), Dated: May 26, 2016
1. New Rule 3(1a): Cenvat Credit of Krishi Kalyan Cess allowed.
2. New proviso (tenth) to Rule 3(4): Cenvat credit other than KKC credit cannot be used for paying KKC.
3. New Clause 3(7)(d): Cenvat credit of KKC Cess can be used only for payment of KKC Cess.
Reverse Charge to apply to KKC: Notification No. 27/2016-Service Tax, Dated: May 26, 2016
Notification No. 30/2012 - Service Tax, dated the 20th June, 2012, shall be applicable mutatis mutandis for the purposes of Krishi Kalyan Cess.
Exempted Services exempted from KKC also: Notification No. 28/2016-Service Tax, Dated: May 26, 2016
1. Taxable services which are exempted from the whole of service tax by a notification or special order or otherwise not leviable to service tax under section 66B of the Finance Act, 1994, are exempted from KKC.
2. KKC payable only on the abated value as per Notification No. 26/2012-Service Tax, dated 20th June, 2012.
3. Value of taxable services for the purposes of the Krishi Kalyan Cess shall be the value as determined in accordance with the Service Tax (Determination of Value) Rules, 2006.
Export Rebate allowed on KKC: Notification No. 29/2016-Service Tax, Dated: May 26, 2016
Krishi Kalyan Cess is included in the definition of "service tax and cess" for the purpose of granting rebate for exported services under Notification No. 39/2012- Service Tax, dated the 20th June, 2012.
Services used in SEZ - Exemption from KKC: Notification No. 30/2016-Service Tax, Dated: May 26, 2016
Krishi Kalyan Cess is included in the notification No. 12/2013 dated 1.7.2013 granting exemption to services used in SEZs. A minor error in the Notification is also corrected.
Service Tax Rules - KKC included: Notification No. 31/2016-Service Tax, Dated: May 26, 2016
A new sub-rule 7D is added to Rule 6 - Payment of Service Tax.
Today we are carrying an article by Advocate Monarch Bhatt on KKC. Please see Krishi Kalyan Cess - yet another Cess! in ST Se GST Tak.