Budget 2016: Govt announces 0.5 per cent Krishi Kalyan Cess to fund farm programmes

Jaitley said the Krishi Kalyan Cess would come into force with effect from June 1, 2016.

By: PTI | New Delhi | Updated: February 29, 2016 5:25 pm
budget 2016, arun jaitley, union budget 2016, 2016 budget highlights, budget agriculture, 2016 budget kisan cess, budget 2016 agri cess, business news, budget news, india news, latest news Jaitley also proposed to amend section 35AD of the Income-tax Act so as to reduce the deduction from 150 per cent to 100 per cent in the case of a cold chain facility. (Source: Express archive)

The government on Monday announced a Krishi Kalyan Cess of 0.5 per cent on all taxable services effective from June 1 this year to fund farm initiatives.

It also proposed cut in excise duty on irrigation pumps and soil nutrients besides slashing import duty on cold storage related equipments.

Watch Budget 2016: Editors First Take on Arun Jaitley’s Announcements

“I propose to impose a Cess, called the Krishi Kalyan Cess, at 0.5 per cent on all taxable services, proceeds of
which would be exclusively used for financing initiatives relating to improvement of agriculture and welfare of farmers,” Finance Minister Arun Jaitley said while presenting the Budget for 2016-17.

He said the cess would come into force with effect from June 1, 2016. “Input tax credit of this cess will be available for payment of this cess,” he added.

Jaitley also proposed to amend section 35AD of the Income-tax Act so as to reduce the deduction from 150 per cent
to 100 per cent in the case of a cold chain facility, warehousing facility for storage of agricultural produce, production of fertiliser among others effective from April 1.

For expenditure on agricultural extensions project, he proposed to amend section 35CCC of the Income-tax Act to restrict the deduction to 100 per cent from financial year 2017-18 (Assessment Year 2018-19).

To encourage cold storage facilities in the farm sector, Jaitley exempted service tax on all facilities provided by the state-run National Centre for Cold Chain Development effective from April 1. At present, the service tax rate is 14 per cent.

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  1. C
    crickin
    Feb 29, 2016 at 3:55 pm
    fc king govt will impose tax on sh iting too. as s are ripping of middle cl. Mo di as should be dum ped in ara bian ocean. first and las t term of this me ss.
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    1. R
      Ramesh D
      May 30, 2016 at 10:03 am
      The Govt trying to convince people introduce one type of Cess final the amount goes wrong way .
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      1. Gaurav Kumar
        May 10, 2016 at 5:29 am
        Much needed move
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        1. J
          Joe
          Mar 2, 2016 at 6:19 am
          When we eat in Hotels they charge service tax for both food and service it sometimes comes nearly 25% extra. Now one more cess to increase the service tax is discouraging us from eating in Hotels, ordering goods online etc. The bright side is I am learning some basis skills such as carpentry, electrical works etc
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          1. V
            VS
            Jun 2, 2016 at 2:39 am
            The goverment is a waste , instead of getting more people to pay tax . They are burdening the ried cl where we are made to paid direct plus high indirect taxes. FM himself is a lawyer can he say how many laywers give bills and pay tax?
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