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No KKC if invoice is raised and services are rendered on or before May 31 2016

Service Tax - By: - Bimal jain - Dated:- 25-6-2016 - Dear Professional Colleague, Pursuing with an objective to finance and promote initiatives to improve agriculture and farmer welfare, the Government announced a new cess namely Krishi Kalyan Cess ( KKC ), to be levied at 0.5% on the value of all taxable services w.e.f June 1, 2016. Hence, after levy of KKC, Service tax rate has increased from 14.5% to 15%, effective from June 1, 2016. Further, Explanation 1 & 2 to Rule 5 of Point of Taxati .....

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within 14 days of the date when the service is taxed for the first time Thus, as per the Rule 5 read with explanations, only in two situations (mentioned above), the KKC shall not be payable and in all others, KKC is to be paid. With the Service tax rate (including Swachh Bharat Cess and KKC) of 15% becoming effective from June 1, 2016, a turmoil was being faced by the service providers in respect of on-going transactions for which completion of services have taken place before June 1, 2016 with .....

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cesses. Now, the Central Government vide Notification No. 35/2016-ST dated June 23, 2016, has exempted taxable services with respect to which the invoice for the service has been issued on or before May 31, 2016, from the whole of KKC leviable thereon, subject to condition that the provision of service has been completed on or before May 31, 2016. Thus, no KKC shall be payable in cases where invoice is raised and provision of service has been completed on or before May 31, 2016. Time of supply u .....

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