Our company has been engaged for construction work of buildings in Renusagar(UP) but the same is being done out the factory premises.
Do we need to deposit the 1 % cess as prescribed.
BOCW Act is applicable to your construction site and you are liable to pay the cess @ 1%.
I take a stand that the Cess is payable by the Principal Employer. This is because:
i. the assessment of cess is done on the basis of total construction cost (excluding land cost and compensation paid / payable under WC) and not on the basis of contractors billing.
ii. the information to be furnished to the assessment officer in 'Form I' is done by the Principal Employer and not by Contractor(s). The assessment order is passed on the basis of this information in 'Form I'.
However, the Principal Employer can make recovery of the cess amount from contractor's billing if it is provided in the agreement signed by both the parties.
I am quoting two different Judgments on this issue as under:
1. It will be the liability of the contractor and not the principal employer to pay welfare cess in respect of workers working at site under building and other construction workers welfare cess Act 1996.
M/s. Gannon Dunkerley & Co. Ltd. vs. State of Madhya Pradesh and Others. 2010 LLR 184 (MP HC)
2. It will be the owner and not the contractor of this establishment who will be responsible to pay Cess under Building & Other Construction Workers (RE&CS) Act.
Adani Agri Logistics Limited and Another vs. The State of Haryana
and Others. 2010 LLR 752 (Punjab & Haryana HC)
You need to take a call on it.
Thanks with regards.
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