Krishi Kalyan Cess @ 0.5% on all taxable services for financing initiatives relating to improvement of agriculture and welfare of farmers

Sh. Arun Jaitley proposed Krishi Kalyan Cess @ 0.5% on all taxable services. Its proceeds would be exclusively used for financing initiatives relating to improvement of agriculture and welfare of farmers. It will come into effect from 1st June, 2016.

To tackle the pollution and traffic situation in the country, the Union Finance Minister proposed infrastructure cess of 1% on small petrol, LPG, CNG cars, 2.5% on diesel cars of certain capacity and 4% on other higher engine capacity vehicles and SUVs. The 'Clean Energy Cess' levied on coal, lignite and peat was proposed to be renamed as 'Clean Environment Cess'. Its rate was increased from Rs. 200 per tonne to Rs. 400 per tonne.

To discourage consumption of tobacco and tobacco products, Sh. Arun Jaitley proposed to increase the excise duties on various tobacco products other than beedi by about 10 to 15%.

Also, an important proposal made was to amend the Finance Act 1994 so as to declare assignment by the Government of the right to use the radio-frequency spectrum and its subsequent transfers a service. This will help clarify that assignment of right to use the spectrum is a service leviable to service tax and not sale of intangible goods.

Source : Equity Bulls

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