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Kkc - carification required

Rakesh Gupta (Manager) (134 Points)

30 May 2016

I would ike to know the applicabiity of KKC :

1. We are importing SErvices from other countries and selling to local customers. The kind of service is Information Technology Software Service which also ocmes under VAT/CST Act. Whether KKC will be applicable on such imports made during May and bills paid during June or any other outstandin Invoice which is not yet paid ?

2. AS in our case payment terms are 30 to 60 days depending on customers, whether the bills not paid by Customer as on 1-6-2016 which actually will be due later will also attract KKC ?

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4 Replies

tushar (Principal associate in lakshmikumaran and sridharan) (21 Points)
Replied 30 May 2016

if services have already been provided in may then no service tax. however the same is disputable. if CCR is available better pay tax

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satya (Executive Excise) (1839 Points)
Replied 30 May 2016

Dear Rakesh,

Import of Services attract Service Tax, receipient should bear the Service Tax.

effective of KKC as per POTR;

Services Provided Earlier to 1.6.2016:

Examples when old rate would apply

a. Invoice raised before and payment received after 1.6.2016: The invoice raised on 15th May 2016, and service provided in May 2016. Payment received in June 2016. The tax to be paid at 14.50%[old rate].

b. Where payment received before and invoice issued after 1.6.2016: The invoice raised on 5thJune 2016, and service provided in May 2016. Payment received on 30th May 2016. The tax to be paid at 14.50% [old rate].

c. When the invoice issued and payment received after 1.6.2016: The invoice raised on 10thJune2016, service provided in May 2016 and payment received on 30th June 2016. The tax to be paid at 15.0%[new rate].

Services Provided Post 1.6.2016:

Examples when old rate would apply

Invoice raised and payment received before 1.6.2016: If invoice raised on 5th May 2016, payment received on 15th May and service provided in June 2016. Then service tax to be paid at 14.5% [old rate].

Examples when new rate would apply:

a. When invoice raised after 1.6.2016 and payment received before rate change: If invoice is raised on 5thJune2016, payment received on 15th May and service provided in June 2016. Then service tax to be paid at 15%[New rate].

b. When invoice raised earlier to 1.6.2016 and payment made post change in rate: If invoice raised on 15th May 2016, payment made on 1.6.2016. Then service tax to be paid at 15%[New rate].

courtesy;Roopa N

1 Like

Rakesh Gupta (Manager) (134 Points)
Replied 30 May 2016

Dear Sathya

There is still something I need to be more clarified :

You have mentioned :

Services Provided Earlier to 1.6.2016:

Examples when old rate would apply

But as the Rule 5 states that in order to have old rate effective, payment must come on or before 1-6-2016 but as per your reply, old rate will be applicable even if payment is received in June 2016.

Could you please recheck and confirm ?

ravi teja (student) (43 Points)
Replied 31 May 2016

Taxability under reverse Charge :-

In respect of the persons required to pay tax as recipients of service the Rule 5 of will not apply as it will be calculated as per Rule 7 of Point of Taxation Rules which reads as follows

"Notwithstanding anything contained in these rules, the point of taxation in respect of the persons required to pay tax as recipients of service under the rules made in this regard in respect of services notified under sub-section (2) of section 68 of the Act, shall be the date on which payment is made :

Provided that, where the payment is not made within a period of six months of the date of invoice, the point of taxation shall be determined as if this rule does not exist:

https://www.caman.in/2016/05/krishi-kalyan-cess-taxability.H T M L