It is a levy/tax imposed by the Union Government on all services, which are liable to service tax, at the rate of 0.5% for financing improvement of agriculture and welfare of farmers.

The proceeds are first credited to the Consolidated Fund of India and the Central Government may, after due appropriation made by Parliament, utilise the money for such specified purposes as it may consider necessary.

KKC is different from the Krishi Kalyan Surcharge (KKS). Surcharge levied at 7.5% of the undisclosed income will be called as KKS, which is also to be used for agriculture and rural economy.