Krishi Kalyan Cess comes into force from June 1; eating out, mobile bills set to become expensive

The Krishi Kalyan Cess of 0.5 per cent, proposed by Finance Minister Arun Jaitleyduring his budget speech, will come into effect from Wednesday and is expected to make restaurant bills, mobile phones, cinemas, visits to beauty parlours, air travel, insurance, DTH, credit and debit cards, courier, healthcare, banking and professional consultancies costlier.
With this move the government proposes to collect Rs 5,000 crore during the remaining 10 months of the current fiscal.
“I propose to impose a cess called Krishi Kalyan Cess at 0.5 per cent on all taxable services, the proceeds of which would be exclusively used for financing initiatives relating to improvement of agriculture and welfare of farmers,” Jaitley had said in his budget speech.
KCC to be levied on all taxable services is aimed at financing and promoting initiatives to improve agriculture. The Central Board of Excise and Customs (CBEC) has notified that the Cess will come into force from June 1. The service tax is levied on all services, expect a small negative list.
“The levy of KKC will add extra burden on the pockets of service recipient. The levy has already been raised from 12.36 % to 15 % within a span of one year only and will contribute to inflationary pressures,” Amit Maheshwari, Partner, Ashok Maheshwary & Associates told PTI.
Last year, the government had imposed Swachh Bharat Cess of 0.5 % on Service Tax.


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