Definition Of Construction Cost Under Labour Cess Act - CiteHR
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Hi Team Members, Can any one give an insight on the definition of construction cost under BOCW Act. What are the components/heads do we consider to calculate cess? Venkat
Dear Venkat,
In BOCW Act., Contruction cost is the Total cost of the work/ Project including the manpower cost.
Cess is the 1% of the total cost of the project.
e.g. if total cost of the project is 4 lac. then the cess would be 4000.

Dear Mr. Venkat
As a matter of fact the Contractor has to pay minimum of 1% and Maximum of 2% Cess as fixed by the appropriate Government. The Cess is to be calculated from the Work done during the financial year or if the work period is less than 1 year then the cost of project will be considered for calculating the Cess.
The cess paid will normally be reimbursed by the Principal Employer on actuals.

please check the state in which you are operating as far as Maharastra is concered the appliciability is still a question mark, as their is provision under BOC for developmenet of centres for their members but still the centres are not develop and also the working central - state issue is yet to be resolved
Your answer to your query lies in rule 3 of the Building and Other Construction Workers Welfare Cess Act, 1998 where the cost of construction is stated as:
"3. Levy of Cess—For the purpose of levy of cess under sub-section(l) of section 3 of the Act, cost of construction shall include all expenditure incurred by an employer in connection with the building or other construction work but shall not include :-
—cost of land;
—any compensation paid of payable to a worker or his kin under the Workmen's Compensation Act '1923.
Therefore, I feel that whichever becomes immovable part of the construction, like doors, windows, grills, wiring seaverage, water and conduit pipes bulb holders electric swiches taps toilet seats washbasin, bath tub, paints etc. should be included in the cost of construction. However, the tubes bulbs, airconditioners inverters movable almirahs tables, chairs and furniture etc. etc. can be excluded.

Dear Jacob Sir, fees structure under Bocw & Cess act 1996 under section 7 as per Central rule in chandigarh.
Kindly explain where it is written that whole project cost shall be involved.
It meant that where a factory is under construction and building and plant and machinery fabrication and erection work is going on simultaneously with building work, whether the cost incurred on procurement and erection of plant and machinery shall also be covered??
Kindly help its urgent.

Dear Sir,
I am working as contractor with Purvanchal Vidyut Vitran Nigam Limited . My client has award a work of Rs. 18 crores which include Supply of materials & erection work. But my contact no. is separate for supply & Erection portion , now client is saying labour cess will be deducted on full amount Rs. 18 crores but according to my opinion labour cess should be applicable on erection portion Rs. 5 crores because there are two separate contact one for supply of materials & another for erection. kindly advised what is the actual fact & please provide any circular / GO / order etc. so that i can convince my client .

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