GST APPLICABLE ON LABOUR CESS AND SEIGNORAGE FEES

[Mukesh Gupta]

Dear Sir,

I have got work contract from Bihar Government for various work. In Some work contract Contract Value show as follow

Cost of Work = Rs.100

GST @12% =Rs. 12

LABOUR CESS 1% =Rs. 1

SEIGNIORAGE FESS = Rs. 5

TOTAL WORK CONTRACT =Rs.118.

MY QUESTION IS I AM LIABLE FOR GST ON LABOUR AND SEIGNIORAGE FEE OR NOT.

BECAUSE IN AGREEMENT LABOUR CESS AND SEIGNIORAGE FEES GIVEN BY BIHAR GOVERNMENT SEPARATELY AND THAT AMOUNT DEDUCTED BY DEPARTMENT .

But GST Officer demanding gst on Labour cess and Seigniorage fees.

I ALSO RAISED THE GST INVOICE TO BIHAR GOVERNMENT AS FOLLOWS

COST OF WORK DONE =Rs.100

GST@12% = Rs.12

LABOUR CESS = Rs.1

SEIGNIORAGE FESS = Rs.5

TOTAL VALUE OF INVOICE =Rs.118

AI Summary

Debate on GST Applicability to Labor Cess and Seigniorage Fees in Govt Contracts Under Section 15 of CGST Act A contractor queried about the applicability of GST on labor cess and seigniorage fees in a government work contract, where these fees are deducted by the Bihar Government. Despite the government not charging GST on these fees, a GST officer is demanding it. Responses varied, with some suggesting GST is applicable based on Section 15 of the CGST Act, which includes any taxes or fees in the supply value. Others argued that labor cess and seigniorage fees should not attract GST as they are not part of the taxable supply value. The discussion highlighted differing interpretations and the need for clarity on applicable rules.