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labour cess @1% impact on service tax, Service Tax

Issue Id: - 111280
Dated: 28-12-2016
By:- ramkishore gupta

labour cess @1% impact on service tax


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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????

Posts / Replies

Showing Replies 1 to 7 of 7 Records

Page: 1


1 Dated: 29-12-2016
By:- KASTURI SETHI

It is not the intention of Govt. to levy Service Tax on tax, cess or duty because it cannot be treated as part of consideration. You do not keep cess in your pocket. You collect cess and deposit with the concerned Govt. Otherwise also tax on tax is never charged cess is also a kind of duty or tax.


2 Dated: 29-12-2016
By:- Ganeshan Kalyani

The service tax is applicable on the consideration received for the services rendered. The labour cess is not a consideration. Hence not to be considered for payment of service tax.


3 Dated: 29-12-2016
By:- KASTURI SETHI

I agree with Sh. Kalyani Ji, an expert.


4 Dated: 29-12-2016
By:- KASTURI SETHI

Is labour Cess part of TDS ? If so, situation will be different. Sh.Ganeshan Kalyani, Sir can throw light on this whether labour cess is part of TDS or not.


5 Dated: 29-12-2016
By:- Ganeshan Kalyani

Labour Cess is not to be considered for deducting TDS.


6 Dated: 26-1-2017
By:- YAGAY AND SUN

Labour cess is paid on the Gross Value of the Contract and also the service tax shall be levied either on the gross value of the contract net of abatement if any. For levying service tax, the Labour Cess shall not be considered. if service tax is shown separately then TDS under Income Tax shall not deducted on the amount of Service Tax.


7 Dated: 26-1-2017
By:- Ganeshan Kalyani

I agree with the views of the experts. Thanks.


Page: 1

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