Krishi Kalyan Cess (Budget 2016)
In the budget of 2016-17, the government declared a Cess for Krishi Kalyan of 0.5% on all chargeable services started from 1st June 1 2016 to fund the initiatives of farming. It as well projected cut in the excise duties on irrigation water pumps as well as soil nutrients apart from cutting import levy on the equipments of cold storage.
“I suggest imposing a Cess, which will be known as Krishi Kalyan Cess, by 0.5% on all chargeable services, profits of which will be completely utilized for financing startups relating to development of agriculture as well as wellbeing of farmers,” Arun Jaitley, the Indian Finance Minister stated while disclosing the 2016-17 Budget.
He further stated that the cess will come into action from 1st June, 2016. FM as well wished to modify the section 35 AD of IT Act to decrease deduction from 150% to 100% in instance of a facility of cold chain, facility of warehousing to store of farming products, produce of fertilizer among others effectual from 1st April, 2016.
For spending on the project of agricultural extensions, he wished to modify section 35 CCC of IT Act to limit deduction to 100% from the monetary year 2017-18.
To support facilities of cold storage in the farming sector, he excluded service taxes on all the facilities given by the National Centre of Cold Chain Development of states effectual from 1st April. Now, the the rate of service tax is 14%.
What is Krishi Kalyan Cess?
|1.||Krishi Kalyan Cess ought to be taxed as well as collected at the rate of 0.5% in conformity with the requirements of the CH-VI. This Krishi Kalyan Cess will be taxed at the rate of 0.5% of the whole sum of the services for financing as well as promoting startups to grow agricultural sector in India.|
|2.||The Krishi Kalyan Cess taxed ought to be additionally to service tax as well as swachch Bharat cess.|
|3.||The proceedings of Krishi Kalyan Cess ought to be first accredited with the CFI and the Union government subsequent to the due appropriation done by the Parliament on this behalf, utilize such amount of capital of this KK Cess for the reasons specified.|
|4.||The requirements of the CH-V of the monetary ACT 1994 as well as the regulations made there under incorporating those which relates to refund as well as exemption from duty, interest as well as penalty ought to be, to the extent that might be, apply next to to the tax as well as collection of KK Cess on chargeable services, since they concern with respect to the tax and tax collection on such chargeable services.|
Finance Minister today, while publicizing the 2016-17 General Budget in Lok Sabha, stated that uniform application of DDT to all the investors deforms the fairness as well as progressive character of the taxes. Jaithley therefore wished that besides DDT compensated by the different companies, tax at 10% of the gross total of dividend would be allocated by the beneficiaries, which is, individuals, firms and HUFs obtaining dividend above 10 lakh rupees per year.