Minor relief given over Krishi Kalyan Cess
June 26, 2016 10:40
In a bid to end the confusion over the retrospective applicability of the new Krishi Kalyan Cess, the government has stated that the 0.5 per cent tax will not apply on services whose invoice had been issued on or before May 31.
Finance Minister Arun Jaitley had in his Budget for 2016-17 fiscal introduced the 0.5 per cent Krishi Kalyan Cess on all taxable services. Proceeds of the cess are to be used for the improvement of agriculture sector and farmer welfare.
While the new cess was to come into effect from June 1, 2016, questions had been raised about its applicability on services like telephony services that are rendered in May but billed in June.
The Central Board of Excise and Customs in a notification said services for which invoice has been raised on or before May 31, 2016, will not attract the new cess.
"The central government, being satisfied that it is necessary in the public interest so to do, hereby exempts taxable services with respect to which the invoice for the service has been issued on or before the May 31, 2016, from the whole of Krishi Kalyan Cess leviable thereon," the notification said.
The new cess will apply on all taxable services including restaurant bills, travel, phone bills,
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