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Dear Keshav Korgaonkar Anup ji,
Thank you very much for your prompt response. It is certainly a lamp of guidance for us. Can I give you a little more trouble! To which Section of the BOCW Act or rules can I link your advice. I shall be immensely thankful to your response.
C.M. Lal Srivastava

Dear All,
hai this is santhosh.i am working ,as an HR OFFICER .Our company manufacture bulk drug(API'S).i need u r help
regarding i would thinking that sriam means S:Scope,R:Rearch and development,I:Idia,A: Abilty,M: Management and need definition to these.
our company have GMP & WHO GMP Certificate.Now it is growing company so we are going to implement HR Policy.so i need u r suggestion
so i need to implement it.
Thank u.

Dear C. M. Lal Srivastava ji,
Thank you for your query. It is an opportunity for me to review myself. I certainly give you my fresh views in this subject. However, I need some time. I will respond you as early as possible.

Dear C. M. Lal Srivastava ji,

As I said earlier, you have given me an opportunity to review my self. Thank you very much once again for the query.

My reply is as under:

In my view, this entire enactment is full of ambiguities.

In this Act nowhere it is mentioned that Principal Employer is liable or contractor is liable or both the principal and contractors are liable to pay this Cess.

On this issue i.e. on liability of the Cess, to my knowledge, there are couples of case laws. Some of them are:

M/s. Gannon Dunkerley & Co. Ltd. vs. State of Madhya Pradesh and Others. 2010 LLR 184 (MP HC);

Adani Agri Logistics Limited and Another vs. The State of Haryana and Others. 2010 LLR 752 (Punjab & Haryana HC);

Builders Association of India v. UOI [(139) 2007 DLT 578];

New India Construction Company v. State of Haryana.

From the above case laws I have not come to any concrete conclusion as to who is liable for the Cess. But I could conclude one thing in my entire review that the liability and responsibility are two separate aspects.



And accordingly, to my view, both the Principal Employer and the contractors are liable for this Cess. But it is the responsibility of Principal Employer to make the payment of Cess.

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); The total construction cost is of the Project and not of Contractor to my understanding;

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'; and

iii. it is just impossible to the government machinery to make an assessment of Cess and collect the same contractor wise. There are so many contractors in each construction site.

The above views are my personal views from the study which I have made on this subject. There is a need to take up the ambiguities in this entire enactment, which are in numbers, with appropriate level. The appropriate level is not the Government officers.

Dear Keshav ji,
Greetings and Merry Christmas!!
I am immensely grateful to your efforts and time dedicated to the review of matter pertaining to recovery of Labour Cess. I really respect your opinion and understanding of the issue with reference to the judgment of the courts in the given context. I fully subscribe to your views that the enactment is faught with ambiguities. The term "total cost of construction" is a term which needs to be defined with precision. It is to be deliberated whether the "cost of construction" will be limited to the cost of civil works only or it will cover civil, plumbing, elecrical fittings internal and external, interiors with furniture etc. This will be highly confusing. There may be instances where turnkey contracts are given by the owner for construction of a

In continuation to above comments which got posted incomplet:

There may be isntances where turnkey contracts are given by the Owner for construction of a building. In such cases the total cost of construction will be determined with reference to the final amount of the bills. Nonetheless it will be even then a matter of clarification and decision as to what will amount to total cost of construction.

The aspect of liability and responsibiliyt have been shown to be separate. The liability and responsibility go together on the analogy of rights and duties. The responsibility of the PE would be fulfilled if it is ensured by it that Labour Cess is recovered from the contractor whether it be one as in case of turnkey contract or more than one if more than one contractor are engaged for different activities. Therefore the main issue involved in the matter is that whether PE/OWNER is justified to recover the Labour Cess from the contractor. I think your earlier opinion still subsits in view of what you have just explained in the latest reply.

I once again thank you for the concern, interest and pains taken in the matter brought to your kind notice through Citehr. I am placed at Delhi and will be pleased to reciprocate same interest and dedication in case you need any assistance from me. My ID is . I have rich professional experience in contract management, government service rules with respect of disciplinary and vigilance cases and administrative matters etc

Wish you Merry Christmas and a very Happy New Year 2013.

Sincerely

C.M. Lal Srivastava

Dear All,

Further to my various posts in this Thread, I wish to share that the Supreme Court has order for the complete implementation of Building and other construction workers Act and Cess Act by all the States and and the union territories.

This news I got it just now while browsing. I could not find the date of the order. But I feel it should be of September or October 2012.

The Supreme Court bench comprising Justice A.B. Patnaik and Justice Swatentar Kumar passed an order in contempt petition directing the CAG to submit its report within two months from the date of order regarding the non-implementation of Building and other construction workers Act, 1996 where all the States and the union territories are made parties.

After long proceeding the Supreme Court itself asked the petitioner to file a contempt case against all the non complying states and the union territories. So the present Contempt Petition was filed under Section 2 (a) of the Contempt of Court Act, 1971 in violation of Hon’ble Court orders in NCCCL Vs Union of India & Others (WPC no. 318 of 2006) where the Hon’ble Court has directed the Respondents to set up the Welfare Boards as per the implementation of the Building And Other Construction Workers (Regulations Of Employment And Conditions Of Service) Act, 1996 (in short the Act) and The Building And Other Construction Workers Welfare Cess Act 1996 (in short the Cess Act) in the respective States and Union Territories in India.

The Hon’ble Court also directed the respondents to deposit the Cess amount which is to be collected from principal employer i.e. the construction companies in the Nationalized Banks only. And the cess is to be disbursed accordingly to the workers as per the appropriate section of the act from the Welfare Board account.

Dear All,

I am sharing as under three articles published in last couple of days on Construction Workers in Maharashtra.

PTI: Mumbai, Jan 04 2013 The Financial Express

Maharashtra govt makes registration of construction workers mandatory



Mumbai: Maharashtra government has decided to make registration of construction workers involved in its projects mandatory.

The construction workers welfare board has a corpus fund of Rs 1000 crore but due to shortage of beneficiaries the money is lying unutilised.

"So far, only Rs six lakh have been spent. Hence, we have decided to make registration of the workers in projects undertaken by government agencies like MMRDA, BMC mandatory," Labour Minister Hassan Mushriff said.

He said contractors should inform the board about the labourers hired by them.

Workers in the housing construction sector do not register with the board. There are around five lakh workers in this sector in the Mumbai -Thane belt. Till September 1, 2012 only 72,218 labourers have registered.

Mushriff said his department will undertake a drive propogate Aam Aadmi Bima Yojana (AABY) which covers death and disability insurance for the benefit of rural landless farmers.

The drive to register beneficiaries will be taken up from January 26 to February 10. Last year, 15 lakh beneficiaries were registered under the scheme and 7,000 people got benefit of death claims.

Stuti Shukla : Mumbai, Mon Jan 07 2013, The Indian Express

Labour welfare fund under-utilised: State

A year-and-a-half after the state started levying 1 per cent cess on the construction cost of projects to raise funds for the welfare of labourers, nearly Rs 1,000 crore has been collected. However, only Rs 6 lakh has been actually utilised so far.

Lack of registration of labourers by builders, little awareness among labourers and government apathy are being seen as the biggest reasons behind underutilisation of the funds. This money can be utilised under 13 schemes meant for labour welfare such as scholarships for labourers’ children, Rs 2-lakh compensation for the family in case of death, low-cost housing, etc.

According to the Building and Other Construction Workers Act 1996 (BOCW), one per cent of the total amount of every construction project worth Rs 10 lakh or more, private or public, must be submitted to the state labour ministry under the head ‘welfare cess’. In Maharashtra, the project cost cap was lowered to Rs 5 lakh and the rule was brought into effect in August 2011.

State Labour Minister Hasan Mushrif said while the the rate at which the amount collected is being utilised is slow. “We have decided to make it mandatory for all government and semi-government agencies to register labourers involved in construction activities in their projects. We have asked MMRDA to register construction workers at Metro and monorail sites and BMC to register workers in its major projects,” said Mushrif.

An estimated five lakh labourers are involved in various construction activities across Mumbai and Thane, of whom only 25,000 have been registered with the Labour Department so far, Mushrif admitted.



For a labourer to get registered, the builder has to produce a certificate stating that he has worked with him for a minimum of 90 days.

A bureaucrat from the Labour Ministry said, “Builders are not serious about getting labourers registered. Moreover, labourers are not aware about this rule.”

The Labour Welfare Board collected Rs 58 crore between 2007 and 2011. Mushrif said publicity campaigns are being planned to create awareness.

New Delhi, Jan 4: The Hindu Business Line

Kharge flays States for under-utilisation of construction cess

The Union Labour Minister Mallikarjun Kharge on Friday criticised States for not utilising huge amounts of funds meant for labour welfare, such as the construction cess. He also pointed at gross under-utilisation of funds meant for skill development, a key focus area of the UPA Government.

Addressing the 45th session of the Standing Labour Committee here, Kharge said only about 15-20 per cent of the funds had been spent. If the money collected for labour welfare is not spent, how can social security be ensured to workers in the informal sector, he added, expressing fears over lower outlay for the Ministry in the next Budget.

According to a report by the Parliamentary Standing Committee on Labour, out of a total Rs 4,316.94 crore cess collected by States, only about Rs 736 crore had been spent till September 2012.



Till September 2012, Delhi had collected the highest cess at Rs 656.29 crore but spent only Rs 28.36 crore, followed by Karnataka, which collected Rs 644.87 crore but spent only Rs 5.45 crore. Andhra Pradesh collected over Rs 472 crore but spent only Rs 12.78 crore.

Kerala had the best record, with over 16 lakh registered construction workers, the State collected a cess of Rs 459.07 crore and spent Rs 351.68 crore on their welfare and other benefits.



Maharashtra, Uttar Pradesh, Uttarakhand, Himachal Pradesh and Goa were among the States that collected cess but had spent nil amount till September.

A one per cent cess is levied on the cost of construction incurred by employers to create a fund for workers in case of accidents, old age pension, loans, medical expenses, etc.



While Kharge blamed the States for non-utilisation of construction cess, the Parliamentary panel, headed by Hemanand Biswal, put the ball in the Labour Ministry’s court. Noting the complete lack of awareness about the scheme, it had asked the Labour Ministry, in its September report, to take steps to ensure that more workers were registered and could avail of the benefits.

According to one estimate, there are close to 30 million workers in the construction sector in India, but only about 67 lakh are registered.

Dear sir,
I just wanted to know that whether in following case labour cess is deducted or not.
one of my client being proprietorship, carrying repair and maintenance work of water tank truck under contract from Gujarat Govt. Water Department. Said dept. is deducting TDS and Labour Cess @ 1% each of payment amount respectively. They are giving TDS Certificate for 1% deduction but nor for Labour Cess.
Kindly confirm me whether labour cess is applicable on contractor of body work of water tank truck ?
Thanking You
Waiting for your valuable reply
Regards
Vishal Bosamiya

Dear All
A company has purchased a lad, now they want to fillt with soil to make it in road level. It is a pre construction activity. Whether the companr require BOCW registration for that. whether the comany has to pay CESS for that.
Please advice


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