Krishi Kalyan Cess – Accounting Code & Rules
CBEC has notified”Accounting code for payment of Krishi Kalyan Cess (KKC)” by the assessees. Also it has issued Notification on issues relating to Krishi Kalyan Cess, like CENVAT Credit etc.
A. Accounting Code for payment of KKC notified by CBEC
The CBEC vide Circular No. 194/04/2016-st dt 26 May 2016 has notified “ACcounting Code for payment of KKC” by the assessees, as under:
Chapter VI of the Finance Act, 2015 is effective from 1st June, 2016 i.e. KKC is leviable on all taxable services, other than services which are fully exempt from Service Tax or services which are otherwise not liable to Service Tax under Section 66B of the Finance Act, 1994, at the rate of 0.5%. Accordingly, accounting codes have also been allotted by the Officer of the Controller General of Accounts (CAG) for the new Minor Head “507-Krishi Kalyan Cess” and new Sub heads, for payment of Krishi Kalyan Cess, as under:
Krishi Kalyan Cess (Minor Head): 0044-00-507
Tax Collection: 00441509
Other Receipts (Interest): 00441510
Deduct Refunds: 00441511
B. Cenvat Credit Rules for KKC Notified by CBEC
The CBEC vide Notification No. 28/2016 – Central Excise dt. 26.05.2016 notified CENVAT Credit Rules, 2016 regarding KKC, on the following lines:
A provider of output service shall be allowed to take CENVAT Credit of the KKC on taxable Services, i.e. the Cenvat Credit of any other duty/ cess/ tax shall not be utilized for payment of KKC. Further, the Cenvat Credit in respect of KKC on taxable services shall be utilized only towards payment of KKC on taxable services. CBEC Notification No. 28/2016-Central Excise (N.T.) dt 26/05/2016
C. Other Notifications of CBEC on issues to KKC
In addition to above notification the CBEC has issued following notifications/ clarifications about the provision relating to KKC under Service Tax:
- Provisions of the Service Tax Reverse Charge mechanism shall be as it is applicable for KKC
- No KKC on exempt services. However, for the services taxable subject to abatement, the KKC shall apply only on specified percentage of taxable value as determined in accordance with the Service Tax (Determination of Value) Rules, 2006.
- Rebate benefits of KKC made avalable to Exporters
- SEZ Units & developers can avail KKC Refund
- Service providers who has opted to pay service tax under Rule 6 of Service Tax Rules, 1994 shall have the option to pay KKC calculated under Rules 6(7E) as under:
Service Tax Liability calculated as per Rule 6 multiplied by effective rate of KKC and dividing the product by the service tax rate specified in Section 66B for any calendar month/ quarter as may be applicable. It may be noted that once the option under this sub-rule is exercised, it shall apply uniformly in respect of such services and shall not be changed during a financial year under any circumstances.