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Treatment of krishi kalyan cess

Aniruddha Prakashkar (Service Tax Practitioner) (84 Points)

10 May 2016

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 ?

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Vishal Goel (Chartered Accountant) (1688 Points)
Replied 28 June 2016

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.