INTERVIEW QUESTIONS TAX KRISHI KALYAN CESS DETAILS

Question: What would be the point of taxation for Krishi Kalyan Cess (KKC)?

Answer: Point of taxation means the point when a service shall be deemed to have been provided. KKC Shall be covered under Rule 5 of Point of taxation Rules 2011 (Hereinafter referred to as “POTR 2011”). It reads as follows:

Payment of tax in case of new services- Where a service is taxed for the first time, then,-

(a) no tax shall be levied to the extent the invoice has been issued and the payment received against such invoice before the service became taxable.

(b) No tax shall be payable if the payment has been received before the service becomes taxable and invoice has been issued within fourteen days of the date when the service is taxed for the first time.

Its important to note that KKC is new levy and not new service. But the government has extended the scope of this rule by inserting two explanation provisions resulting which new levy is covered under the ambit of Rule 5.

Rule 5 of the Point of Taxation Rules, 2011 has been amended with effect from 1st March 2016 by Notification No 10/2016-ST dated 1st March, 2016 and two Explanations (Explanation 1 & 2) have been inserted in said Rule. After the amendment, Rule 5 reads:

Explanation 1: This rule shall apply mutatis mutandis in case of new levy on services.
Explanation 2: New levy or tax shall be payable on all cases other than specified above.

Rule 5(a) provides that when the issuance of invoice and receipt of payment is made before the date of taxability then the service shall be non-taxable.

Rule 5(b) stipulates that if the payment received before date of taxability and invoice is issued within 14 days from the service becoming taxable for the first time even then no service tax to be charged.

Further, new insertion by way of explanation has resulted in expanding the scope of rule 5 to new levy erstwhile limited to new services only.

Point of taxation means the point when a service shall be deemed to have been provided. KKC Shall be covered under Rule 5 of Point of taxation Rules 2011 (Hereinafter referred to as “POTR 2011”). It reads as follows:

Payment of tax in case of new services- Where a service is taxed for the first time, then,-

(a) no tax shall be levied to the extent the invoice has been issued and the payment received against such invoice before the service became taxable.

(b) No tax shall be payable if the payment has been received before the service becomes taxable and invoice has been issued within fourteen days of the date when the service is taxed for the first time.

Its important to note that KKC is new levy and not new service. But the government has extended the scope of this rule by inserting two explanation provisions resulting which new levy is covered under the ambit of Rule 5.

Rule 5 of the Point of Taxation Rules, 2011 has been amended with effect from 1st March 2016 by Notification No 10/2016-ST dated 1st March, 2016 and two Explanations (Explanation 1 & 2) have been inserted in said Rule. After the amendment, Rule 5 reads:

Explanation 1: This rule shall apply mutatis mutandis in case of new levy on services.
Explanation 2: New levy or tax shall be payable on all cases other than specified above.

Rule 5(a) provides that when the issuance of invoice and receipt of payment is made before the date of taxability then the service shall be non-taxable.

Rule 5(b) stipulates that if the payment received before date of taxability and invoice is issued within 14 days from the service becoming taxable for the first time even then no service tax to be charged.

Further, new insertion by way of explanation has resulted in expanding the scope of rule 5 to new levy erstwhile limited to new services only. Source: CoolInterview.com

If you have the better answer, then send it to us. We will display your answer after the approval.

Rules to Post Answers in CoolInterview.com:-

• There should not be any Spelling Mistakes.
• There should not be any Gramatical Errors.
• Answers must not contain any bad words.
• Answers should not be the repeat of same answer, already approved.
• Answer should be complete in itself.

Name :*
Email Id :*
Answer :*
Verification Code	Not readable? Load New Code
Enter the above shown code: *
	Inform me about updated answers to this question