Summary of Post
As you all know, from 1st June 2016 onward a new cess is introduced on all taxable services by India Goverment. The rate of KKC -Krishi Kalyan cess is 0.5% on assessable vale of taxable services.From Tally ERP 9 Release 5.3.8 you will find new option called Krishi Kalyan Cess under Duties and taxes. Lets have a detailed discussion on KKC in Tally ERP 9.
After implementation of KKC the rate of service tax become 15% on taxable service provided.Now service tax collected as follows.
- Service tax – 14 % – Calculated on total taxable services
- Swachh Barath Cess – 0.5 % – Calculated on total taxable services
- Krishi Kalyan Cess – 0.5% – Ccalculated on total taxable services.
- Total Service tax collected is now – 15 %.
Accounting Codes for Krishi Kalyan Cess
New accounting codes has been alloted for the payment of KKC Vide circular No Circular No. 194/04/2016-ST F. No. 354/31/2016-TRU. The Accounting codes is as follows.
|Sr No||Krishi Kalyan Cess (Minor Head)||Tax Collection||Other Reciepts (Interest)||Deduct Refunds||Penalties|
Important Points to note
- Cess will be accounted separately and paid to government using account head provided above.
- CENVAT Credit is available for the payment of Krishi Kalyan cess.
- CENVAT credit on service tax cannot be utilized for the payment of KKC.
How to implement Krishi Kalyan Cess in Tally ERP 9
To implement KKC in Tally, you have to update your Tally ERP9 to the latest version of Release 5.3.8 .After updating the software.
Define Krishi Kalyan Cess in Tally.ERP9
You can define Krishi Kalyan Cess at company level, Ledger level,Group Level or even in voucher type level. Here I am Setting KKC rate in Company Level. To do this go to
Gateway of Tally> F11 Features>Statutory & Taxation
In the statutory and taxation screen enable the option Set/alter service tax details to Yes.
Press Enter,You will be in new screen called service tax details screen, In that screen you will find same option again, set/alter service tax details
Enable this option by typing Yes and press enter key.Again A service category creation screen will appear,In the screen Enter the tax details as follows.
- Service tax -14%
- Swachh Bharat cess : 0.5 %
- Krishi Kalyan Cess( KKC) : 0.5 %
Applicability date 01-06-2016. Press Enter to save all the screens opened.
Creating Krishi Kalyan cess Ledger in Tally ERP9
To create KKC Ledger
Gateway of Tally> Accounts info> Ledger > create
Name : Enter name of the ledger
Under: Duties & taxes
Type of Duty/ tax : Select , Krishi Kalyan Cess.
Rounding Method: Select desired method and save the screen.
Service Invoice or voucher entry with Krishi Kalyan Cess
Lets create a scenario for the service tax voucher with KKC.
Lets enter this service invoice or service voucher with KKC transaction in Tally.ERP 9.
Go to Gateway of Tally> Accounting Vocuher> F8 Sales
- Choose Alt + I for selecting Accounting Invoice if not already selected.
- Enter The reference Number , Party A/c Name : XYZLtd,
- Particulars : Architect Service and its amount in our case 100000
- Service tax in the next line, tax automatically calculated.
- Swacch bharat cess in the next line tax calculated automatically @ 0.5%
- Krishi Kalyan Cess @ 0.5% in the fourth line press enter and save the screen.
Now Press Enter to accept the screen.
Recommend Read : How to configure Service tax with Krishi Kalyan Cess complete setup guide