Krishi Kalyan Cess (KKC) was levied @ 0.5% on all taxable services with effect from 1st June 2016.

As per the provisions of Point of Taxation Rules 2011, KKC is liable to be paid on all amounts received on or after 1st June 2016 irrespective of the actual date of provision of service or date of invoice. This necessitated issuance of supplementary invoice to collect KKC from the service recipient or a situation where service provider would have to pay the same from its own pocket.

To mitigate hardship, the Government vide Notification 35/2016 – ST dated 24 June 2016 has exempted all taxable services from KKC where invoice was issued and service was provided on or before the 31 May 2016.

Comment

This exemption shows the Government’s commitment to mitigate hardship of the business.