Updates and details for Krishi Kalyan Cess (KKC) – Meaning, Calculation, Applicability:
Krishi Kalyan Cess is also known as KCC. In this article, I have given the definition of KCC, How to calculate KCC and also Applicability of KCC. So, just scroll down and read the full article for more details.
Krishi Kalyan Cess:
A Cess is a tax which is collected by the government to be used for a specific purpose. The collections from the levy of cess can be used only for the purpose for which it has been collected and not for any other purpose. Just like Swachh Bharat Cess is for cleanliness, similarly, Krishi Kalyan Cess is for improving Agricultural facilities.
How to calculate Krishi Kalyan Cess (KCC)?
Krishi Kalyan Cess would be calculated in the same way as Service tax is calculated. Therefore, KKC would be levied on the same taxable value as service tax. KKC is not to be calculated on Service Tax but on the taxable value of the service provided.
Example of Krishi Kalyan Cess calculation –
For a service worth Rs. 100, Service Tax will be Rs. 14 at 14% rate and Swachh Bharat Cess (SBC) will be Rs. 0.50 at 0.5%. Similarly, Krishi Kalyan Cess will be Rs. 0.50 at 0.5%.
So the total chargeable amount will be Rs. 115.
Check few calculation examples below:
| # | Time of issuance of invoice as well as amount of Invoice | Time of receipt of payment as well as amount of payment received | Position of Taxability |
| 1 | 28.5.2016 for Rs 5,00,000 | 29.5.2016 for Rs 5,00,000 | Non Taxable as issue of invoice and receipt of payment before 1 st June 2016 |
| 2 | 28.5.2016 for Rs 5,00,000 | 29.5.2016 for Rs 4,00,000 | Non Taxable to the extent of 4,00,000 because only part payment has been received for the same before the date of taxability of service or new levy. The Balance Rs 1 Lac, if paid after 31.5.16 will be subject to KKC |
| 3 | 4.6.2016 for Rs 5,00,000 | 29.5.2016 for Rs 5,00,000 | Non Taxable as receipt of payment before 1 st June 2016 while invoice issued within 14 days from taxability of service. |
| 4 | 20.6.2016 for Rs 2,50,000 | 24.5.2016 for Rs 2,50,000 | Taxable as an essential requirement of issue of the invoice within 14 days from the date of service is not met. |
| 5 | Total consideration was 6 Lacs. On 28.5.2016 invoice was issued for Rs 2,50,000 and remaining invoice on 19.6.2016 | 29.5.2016 for Rs 6,00,000 | Non Taxable to the extent of 2,50,000 because part payment invoice was issued after 14 days from the date of Invoice. |
Applicable Date of KCC:
Krishi Kalyan Cess (KCC) is applicable from 1st June, 2016.
Krishi Kalyan Cess is not applicable on Services mentioned in “Negative List” and “Mega Exemption List”. As per the Notification No. 22/2015,t KKC would not be applicable on services exempted from levy of service tax.
Rule 5 of Point of Taxation Rules’ 2011 need to be referred for its applicability in the case of ongoing contracts on 01.06.2016. Thus, if payment is made before 01.06.2016 then this cess is not applicable.
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