GST on Labour Welfare Cess

[Krishna Murthy]

Sir, is GST applicable on Labour Welfare Cess collected under BOCW Act. Sec 15 of CGST says any taxes, cesses, duties other than GST should be included in valuation. Any specific notification or circular in this matter?

[KASTURI SETHI]

No deduction on account of Labour Welfare Cess is allowed from transaction value to arrive at taxable value. In other words, GST is to be paid on Labour Welfare Cess. Only Compensation Cess and Kerala Flood Cess are to be excluded from transaction value. Views of other experts are also solicited.

[Rajagopalan Ranganathan]

Sir,

According to Section 15 92) (a) of CGST Act, 2017 "any taxes, duties, cesses, fees and charges levied under any law for the time being in force other than this Act (CGST Act), the State Goods and Services Tax Act, the Union Territory Goods and Services Tax Act and the Goods and Services Tax (Compensation to States) Act, if charged separately by the supplier.

Therefore the views expressed by Shri. Sethi Sir is legally valid.

[Ganeshan Kalyani]

The section is clear in this aspect. That is other than gst component all other taxes shall form part of transaction value. Since section is clear there is not separate notification in this respect.

AI Summary

GST Applicable on Labour Welfare Cess Under BOCW Act; No Deduction Allowed from Transaction Value per Section 15 of CGST Act. A query was raised regarding the applicability of GST on Labour Welfare Cess collected under the BOCW Act. It was clarified that GST must be paid on Labour Welfare Cess, as no deduction is allowed from the transaction value for this purpose. Only Compensation Cess and Kerala Flood Cess are excluded. The discussion referenced Section 15 of the CGST Act, 2017, which includes taxes, duties, and cesses in the transaction value unless specified otherwise. The consensus among the participants was that the section clearly mandates the inclusion of such cesses in the taxable value.