Effective Rate of Service Tax on Works Contract under composition scheme " 

Effective rate of service tax on services involved in Execution of Works Contract under composition scheme is 2.06%. i.e. 

Basic Rate of Service Tax	= 2%
Education Cess	= 2% on 2%
S H E Cess	= 1% on 2%
Total	= 2.06%

Effective Service Tax Rate on works contracts clarified to include basic tax plus education and SHE cesses. Effective rate of service tax on services in execution of works contracts under the composition scheme is 2.06%, composed of a basic service tax of 2% plus an Education Cess at 2% of the basic levy and a Secondary and Higher Education Cess at 1% of the basic levy, yielding an aggregate effective rate of 2.06% on the service component.