Krishi Kalyan Cess applicability: service tax rate raised and point of taxation disputes arise over payment, invoice, and reverse charge.
A new Krishi Kalyan Cess (KKC) effective 1 June 2016 imposes an additional levy on taxable services, increasing the service tax rate to 15%; cenvat credit for KKC is permitted by circular for service providers but not for manufacturers and no rule amendment has been made; Point of Taxation issues arise under Rule 5 for forward charge (based on payment/invoice timing) and under amended Rule 7 for reverse charge (invoice date can be POT where service and invoice preceded the change but payment remained unpaid), with divergent professional views noted. (AI Summary)