As you are aware that the Central Government has introduced Krishi Kalyan Cess (KKC) @ 0.5% on the value of taxable services w.e.f. 1st June 2016. As per point of taxation, KKC was payable on all service invoices which are raised before 1st June 2016 and their respective payments remain outstanding as on 1st June 2016. This provision has created lot of confusion and resulted into huge debate.
In this connection, the Central Government has issued Notification No. 35/2016-ST dated 23rd June 2016 wherein payment of KKC is exempted on all taxable services with respect to which services are completed on or before 31st May 2016 and invoices are also raised on or before 31st May 2016. Copy of notification is attached for your ready reference.
Kindly consider this exemption while making payment of KKC for the month of June 2016.