What is Krishi Kalyan Cess? – 0.5% increase in Service Tax Rate from 1st June 2016

Krishi Kalyan Cess has been introduced by the Finance Act, 2016 @0.5%. It can be understood as any other cess including education cess, Swachh Bharat cess, etc.

The new tax rate after including the Krishi Kalyan cess (KKC) will be 15%.

The fundamental property of any cess is to spend on the same purposes for which it is collected. It is dedicated to that effect only. E.g. Swachh Bharat cess is levied to fund the Swachh Bharat initiatives of PM Narendra Modi.

Krishi Kalyan cess is collected to fund the farming needs of our agriculture sector.

Input Credit of Krishi Kalyan Cess?

The input of Krishi Kalyan Cess will be available against the payment of Krishi Kalyan cess only.

Other Important Information about Krishi Kalyan Cess

There are few important points on Krishi Kalyan Cess, which are introduced in Finance Act, 2016.

• This cess is introduced to provide financial support to the farmers so that our agriculture sector can be improved.
• The Indian government will directly help the farmers either by waiving off the current interest and loans or directly provide the financial support in the form of infrastructure loans without security. All of this will be funded through this cess.
   

Conclusion

Krishi Kalyan Cess is mandatory and hence, please be careful while paying this cess as the input of this cess is not available.