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LEVY OF KRISHI KALYAN CESS

Service Tax - By: - SARAVANAKUMAR BALASUBRAMANIAN - Dated:- 1-6-2016 Last Replied Date:- 2-6-2016 - ALL ABOUT KRISHI KALYAN CESS Basic Points Hon ble President of India has given asset to Finance Bill, 2016 on 14th May, 2016. A new cess called Krishi Kalyan Cess (KKC) will be applicable from 01st June, 2016 on all taxable services making the effective service tax rate to 15% from the present 14.5%. Objective of this levy is to finance and promote initiatives to improve agriculture or any other p .....

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eb, 2016 States that credit of KKC paid on input services shall be allowed to be used for payment of the proposed cess on the services provided by a service provider. Hence it is understood that KKC paid is not allowable as cenvat credit on input services to a manufacturer. Though as per circular it is allowed as credit for a service provider, as on the date of this article, no amendment has been made in Rule 3 of cenvat credit rules to enable the service providers to avail the same. It is highl .....

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n or before 31st May, 2016 then KKC shall not be applicable. If payment for the services provided is received on or before 31st May, 2016 and invoice is raised after 31st May, 2016 but within 14 days from the date new levy i.e. 01st June, 2016 then also KKC shall not be applicable. In case payment is received only after 31st May, 2016 then KKC would be applicable irrespective of the date of raising invoice and date of provision of service. It is imperative to note here that Rule 5 does not talk .....

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ange in liability of service receiver may be as a result of change in rate of tax or new levy, and service is provided and invoice is issued before such change but payment has not been made as on that date then POT for the service recipient shall be the date of invoice. This amendment acts as beneficial provision for the service recipient. X ltd has received a bill for ₹ 1,00,000 from security agent (individual) on 15-05-2016 for the services provided from 01-04-2016 to 30-04-2016. Payment .....

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ange in liability. In the above case, it is 31-05-2016. So service is provided before change in liability. Invoice for above service is raised before date of change in liability. In our case date of invoice is 15-05-2016. Since two conditions are satisfied point of taxation shall be 15-05-2016 and rate of service tax payable under reverse charge mechanism is 14.5% and not 15%. However, due date for remittance of service tax liability is 06-06-2016 in case of persons other than individual, partne .....

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