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 exclusion from taxable consideration: cess paid to government is not subject to service tax.
Labour cess collected and remitted to government is not consideration for services and therefore is excluded from the service tax base; service tax is charged on the gross contract value net of abatement but not on statutory cess. Labour cess is likewise not part of amounts for TDS deduction, and separately shown service tax should not attract TDS.