The Finace Act, 2016, has increased the Service Tax by including a nee cess by the name Krishi Kalyan Cess, which is applicable w.e.f. 01-06-2016. The effective rate of Service Tax  for all new services provided on or after 01-06-2016 is given below:

Service Tax                         : 14.00%

Swatch Bharath Cess       :  0.50%

Krishi Kalyan Cess            : 0.50%

Effective Rate                    : 15.00%

The bifurcation of three elements as shown above should be clearly shown in the invoice. CENVAT Credit will be available on Krishi Kalyan Cess. But for Swatch Bharath Cess, Cenvat Credit will not be available.

The treatment of invoices outstanding as on 31-05-2016 is given below: