labour cess @1% impact on service tax

[ramkishore gupta]

I wolud like to know that Labour cess deducted by Govt authority @1% on contract work bill will be included or excluded from computation of service tax amount.

For eg if my total bill is 15,05,714.00 vat charged is ₹ 75282 and labour cess @1% is ₹ 15057.00

While computing service tax amt labour cess will be excluded or included????

AI Summary

Labour Cess Excluded from Service Tax Calculation on Contract Work; Not Considered Part of Service Value A discussion on whether the 1% labour cess deducted by the government on contract work bills should be included in the computation of service tax. Participants agree that service tax should not be levied on taxes, cess, or duties, as these are not part of the consideration for services rendered. Labour cess should not be included in the service tax calculation, as it is not a consideration. Additionally, labour cess is not subject to TDS deduction. The consensus is that service tax applies only to the net value of the contract, excluding labour cess.