Go AD-FREE with CAclubindia Pro and Daily WhatsApp Updates. Subscribe Now!

Treatment of krishi kalyan cess

330 views 1 replies

Aniruddha Prakashkar

Service Tax Practitioner

84 Points Joined April 2012

Dear All, I wish to understand how would the KKC be charged in case of RCM ? On the same line in SBC (50:50: charged & paid by both parties for Works Contract) or 100% shall be charged by Service provider ?

Replies (1)

Vishal Goel

Chartered Accountant

1693 Points Joined April 2014

KKC will be applicable on all taxable services, so here Reverse Charge Mechanism is also applicable. Therefore, Krishi Kalyan Cess is payable along with service tax on the services availed and hence, covered under reverse charge mechanism.

Suppose value of Service is Rs 1000 den Service Receiver is liable to pay Rs - 140 for service tax, Rs - 5 for SBC & Rs - 5 KKC to government under reverse charge mechanism...

SBC would be calculated in the same way as Service tax is calculated. Therefore, SBC would be levied on the same taxable value as service tax. SBC is not to be calculated on Service Tax but on the taxable value of the service provided.