KKC in invoice of 31/5/16

[Sanjay Aggarwal]

Dear Sir,

A service provider has raised the invoice on 31.05.2016 for service performed by them and they are charging the KKC in the invoice dated 31.05.2016. and the fact is that the payment will be made to them in june 2016.

now my question is, eventhough payment will be made to them in june 2016, CAN THEY CHARGE KKC ON INVOICE DATED 31.05.2016 ?

AI Summary

Krishi Kalyan Cess: cannot lawfully be charged on pre-levy invoices; levy applies when payment received after commencement.
Charging Krishi Kalyan Cess on an invoice issued before the levy is without authority if payment and taxability would have occurred before the levy; if payment for such an invoice is received on or after commencement of the levy, the service provider may recover KKC by issuing a supplementary invoice in line with the Point of Taxation Rules and their Explanation. A notification grants exemption from KKC where the invoice was issued on or before 31 May and the service was completed on or before 31 May.