The document discusses Krishi Klayan cess, a tax introduced by the Indian government in 2016 to improve agricultural facilities. The cess is collected at 0.5% on all taxable services and can only be used for agriculture-related purposes. It is aimed at financing initiatives to promote agriculture and farmer welfare. The effective service tax rate increased to 15% with the addition of the 0.5% Krishi Klayan cess on June 1, 2016.

1. Krishi klayan cess
Presented by:
Prinesha atulbhai nakrani

2. Introduction:
A krishi kalyan cess has been introduc-
ed for improving agricultural facilities. A cess is basically a
tax that is collected by the government to be used for a spec-
ific purpose. The collections from levy of cess can be used
only for the purpose for which it has been collected and not
for any other purpose. In the case of krishi kalyan cess, the
amount collected though this cess can only be used for the
purpose of improving the Agricultural facilities.

3. Meaning of kkc:
A small business Guides, Taxation .
Finance minister, Mr. jaitley had proposed to impose
a cess, called the Krishi kalyan cess (KKC), at 0.5%
on all texable services during Budget 2016. Effectiv-
e date of Krishi Kalyan Cess is 1st june 2016.

4. What is krishi kalyan cess ?
 A cess is tax that is collected by the government
to be used for specific purpose.
 The collection from levy of cess can be used only
for the purpose for which it is collected.
 Krishi Kalyan cess has been introduced by the go-
vernment W.e.f 01.06.2016 for improving agricultu
re facilities.
 The effective rate of service Tax from 1st june 2016
would be: 14%(service tax) + 0.5%(swachh Bharat -
cess) +0.5%(Krishi Kalyan cess) =15% .

5. Explanation :
 The cess means tax levied by the government to raise
funds for a specific purpose. So now we can guess it is
something about “farmers’ s kalyan/ welfare ”.
 This cess would be used for financing initiatives relatin-
g to improvement of agriculture and welfare of farmers.
It also proposed cut in excise duty on irrigation pumps
and soil nutrients besides slashing import duty on cold
on cold storage related equipments.

6. What purpose KKC is proposed to
be levied?
 KKC is proposed to be levied for the purpose of financing
and promoting initiatives to improve agriculture andfarm-
ers walfer or for any other purpose relating thereto.

7. Particulars Tax/cess(Rs)
Value of taxable service : (a) 1,000/-
Add: Service tax@14%on (a) 140/-
Add: SB Cess @ 0.5%on (a) 5/-
Add:KKC @ 0.5% on (a) 5/-
Total: 1,150/-

8. How it will be calculated ?
 “Example of KKC calculation-
For a service worth Rs.100, service tax will be Rs.14
at 14% rate and Swachh Bharat cess (SBC) will be Rs.
0.5 at 0.5% . Similarly, Krishi Klayan cess will be Rs.
0.5 at 0.5% .
So, the total chargeable amount will be Rs.115

9. What is the budget target for KKC ?
Rs. 5000 crore

10. The date of applicability of KKC ?
 KKC would be levied at the rate of 0.5% on the value
of all taxable services with effect from june 1 , 2016
vide section 161 of the Finance Act , 2016 .

11. s.
NO.
Krishi
Kalyan
cess
(Minor
head)
Tax
collection
Other
Receipts
(Interest)
Deductio-
ns/
Refunds Penalty
1. 004400507 00441509 00441510 00441511 00441512