who is responsible for deduction of BOCW Labour cess?
what is the amount on which BOCW Labour cess is levied?
is BOCW Labour cess amount in refundable if yes on what condition?
Ravi Rudra Singh

From India, Dehra Dun
Industrial Relations
Sisira Kumar Gouda
Ir & Administration
Korgaonkar K A
Admin Officer
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same question i am also facing. can any one post any recent judgement where it is clarified the issue of payment of cess
From India, Mumbai

Dear Ravi and Anjali
BOCWW Cess is to be paid by the contractor who got registered under BOCW Act. The amount is Minimum of 1% and Maximum of 2% of the Contract Value of Construction work or the construction work carried out during the Financial Year, as fixed by the appropriate Government. Normally the Letter of indend is the proof for Contract Value to calculate the Cess Percentage or the Inspecting authority will decide the value of the Construction work carried out during the financial year.
For your easy and ready reference I am attaching herewith the BOCW Act, 1996, BOCW Welfare Cess Act, 1996, BOCW Welfare Cess Rules,1998.
All the best

From India, Kumbakonam

Attached Files (Download Requires Membership)
File Type: doc BOCW ACT, 1996.doc (163.5 KB, 6658 views)
File Type: doc BOCW Welfare Cess Act, 1996.doc (67.5 KB, 2917 views)
File Type: doc BOCW Welfare Cess Rules, 1998.doc (115.5 KB, 3258 views)


thank you very much for quick response but just copy of this act will not help me as i wanted to give documentary proof where it is quoted that the responsibility of payment of labour cess lies on ..... etc. as i understand the same should be paid by employer where there is no contractor and if contractor is appointed then it the contractor who has to pay hence i need judgment copy if available

From India, Mumbai

As a matter of fact the payment will be made by the Contractor to the Government and it will be normally reimbursed by the principal employer, because all the taxes will be reimbursed by the PE as per works contract deal with PE.
From India, Kumbakonam

Dear Ramanpreet and Dharmendar
The BOCW Cess is payable to the Government (BOCW Welfare Commissioner of your State). The liability of payment of Cess is varying from state to state. But if the clause is mentioned in the Letter of Indent / Work Order issued by the Principal employer, then the PE has to make payment.

From India, Kumbakonam
korgaonkar k a

Dear Ravirudrasingh,

Answer to your first query:

According to me, 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).

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.

In case Principal Employer is PSU / Govt. U/T, cess is payable by the contractors.

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)

Answer to your 2nd query:

Cess is payable at 1% on cost of construction which includes all expenditure incurred by an employer in connection with the building or other construction work excluding (i) cost of land and (ii) any compensation paid or payable to a worker or his kin under the Employees Compensation Act 1923.

Answer to your 3rd query:

Cess is non refundable.

I hope my answers are appropriate to your all the queries in this thread.

From India, Mumbai

Dear Ravi,
1) Cess is to be paid by Employer (if he himself executes the project) or by the Contractor (if the employer executes the work through contractor) and includes sub-contract also.
In simple, cess is to be paid by sub-contractor or contractor or employer, who ever executes the construction work.
2) cess is to be paid on 1% of the total construction cost (except cost of the land, compensation paid under WC Act) ... it is only 0.3% in Tamilnadu
3) Cess is not refundable in any case. However, the amount of compensation paid to the workers during that year, can be deducted from the cess payable

From India, Madras
korgaonkar k a

Dear Ravirudrasingh,
Please refer to my postings in following link to review the answer given by me to your first query.

From India, Mumbai
Hi Seniors, I am newly joined in Construction and i would kindly request you to send me the format of Annual Returns under BOCW act.
From India, Bangalore

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