DO YOU KNOW how the Krishi Kalyan Cess will work.....

The Krishi Kalyan Cess has come into effect from Wednesday, and will apply on all taxable services. Here are 10 things to know about the new cess:

1. The Krishi Kalyan Cess will be at 0.5 per cent on taxable services.

2. The 0.5 per cent addition will bring the service tax to 15 per cent.

3. The new cess will apply on telephone bills, restaurants, cinemas, visits to beauty parlours, train and air tickets, insurance, DTH, credit and debit cards, couriers, healthcare, banking and professional consultancies
.

4. The Centre hopes to raise Rs 5,000 crore in the current financial year through the cess.

5.

The proceeds of the cess would be used exclusively to fund initiatives for improvements in agriculture and the welfare of farmers, Jaitley had said.

6. The Krishi Kalyan Cess had been announced by Union Finance Minister Arun Jaitley as part of Budget speech in Parliament on February 29.

7. He had announced that the cess would apply from June 1.

8. Two cesses that had applied earlier - education cess and secondary and higher education cess - have been subsumed into the service tax itself.

9. The Krishi Kalyan Cess has caused some discomfort from the corporate sector over concerns that it has created a retrospective taxation liability.

10. Experts say the retrospective tax impact of the cess is caused by Rule 5 of the Point of Taxation Rules of 2011, which will make the cess applicable on bills realized after June 1, even if the service was provided earlier.