Boss2966
Industrial Relations
Neer300182
Hr, Legal Compliance & Er-ir
Jpratap
Dy Lab Comm, Pb (retd), Consultant And Qualified
Puttaraju.M
Hr Professional
Agb26
Sr. Asst. Manager - Admin / Liaising
+4 Others

Dear Sir, Kindly let me know who is the responsible person to pay cess under the Building and Other Construction Worker’s Welfare Cess Act,1996 and Rules 1998. Thanks and Regards Puttaraju.M
5th December 2007 From India, Bangalore
Dear MR. Putta raju
If any person carrying on the building or other construction work, liable to pay the cess under section 3, fails to furnish any return under sub-section (1), the officer or the authority shall give a notice requiring such person to furnish such return before such date as may be specified in the notice.
Satya
5th December 2007 From India, Hyderabad
Dear Friends,

According to Section 3(1) of the Building and Other Construction Worker's Welfare Cess Act, 1996 (in brief the Cess Act), the cess is levied on the 'cost of construction' incurred by an employer.

The word 'employer' is not defined under the Cess Act; but according to section 2(d) of the Cess Act, the words and expressions used but not defined and defined in the Building and Other Construction Workers (RECS)Act, 1996 (in brief, the Main Act) shall have the meanings respectively assigned to them in that Act.

Under the Main Act, The word 'employer' is defined in section 2(1)(i) which says that in relation to an establishment, it means the owner thereof and include:-

(i)....... the authority or head of govt. deptt.;

(ii)....... the chief executive officer or authority of a local authority; and

(iii) in relation to a building or other construction work carried on by or through a contractor, or by the employment of building workers supplied by a contractor, the contractor.

In the ultimate analysis, therefore, for the purpose of payment of Cess, we have to construe that person as employer who has 'incurred the cost of construction'. Now, it would the easy to ascertain as to who is the real employer - whether a contractor or the owner. Even if the contractor pays according to his agreement with the owner, it is the owner from whom he gets reimbursement of the same. Hence, in my view, in real terms, the owner is the employer for the purpose of levy and collection of cess as per section 3(1) of the Cess Act.

Best wishes,

Jpratap
12th October 2008 From India, Chandigarh
Mr. Jpratap,
It is very useful contribution towards labour welfare cess. Pls clarify one thing on this. A Subcontractor working under the main contractor is liable to pay labour welfare cess??? A sub contractor given hardly 10% scope of total construction getting payment directly from main contractor or promotor is liable to pay 1% labour welfare cess???? If it is liable to pay by way of deducting from the bills of subcontractor, shall the sub contractor be provided with any kind of certificate or challan copy for claiming Income tax exemption to the tune of cess amount????
Could you pls clear this.
T.Kumar
99400 85550
Chennai.
22nd May 2009 From India, Madras
Dear Kumar,
Pls go through the definition of 'employer'. The opening lines says that it is the owner of an establishment. Hence, it is the owner who is to pay cess.
Deduction at source is done only in case of govt or PSUs etc. The employer i.e. the department shall deduct cess from the bills of the main contractor. The main contractor may have appointed several sub-contractors and he may deduct the same from their bills so that ultimately he gets the cess reimbursed which has been deducted from his bills.
Private owner has to pay the cess himself.
Contractor or sub contractor may ask for a certificate of deduction for income tax purpose.
Wishes
Jpratap
25th May 2009 From India, Chandigarh
Almost all States and UTs, as the Hon’ble Supreme Court is monitoring its implementation. Jpratap
8th January 2010 From India, Chandigarh
Who is the authority to monitor or control or inspect the implementation of BOCW Act 1996 in the state of Maharashtra?. Is it any way connected with State Labour Department? May I get Office address of the authority for the Nagpur city.
12th February 2010 From India, Pune
I have a problem in this matter. In Orissa, here is a Govt project "Laying of pipe line" worth Rs 5 crore, of which 4 crore is cost of C.I. pipe and 1 crore is laying cost. Now from which amount I will deduct tax from contractors bill. From total 5 crore or from 1 crore(labour part)...Pls let me know...
18th March 2010 From India, Dhanbad
Dear Ms. Shivani, Greetings for the day:) Please confirm about which state you wants to know that it is applicable or not??
19th March 2010 From India, New Delhi
Dear Mr. Barasat, Greetings for the day :) It will be deducted on 1 crore mentioned as laying cost
19th March 2010 From India, New Delhi
Dear
Look at the terms of the tender. If the tender document contains 1% cess on the cost of construction and the cost specified by the contractor is 5 crores that means it is inclusive of 1% cess. By not deducting cess at source, you would be favouring the contractor. Hence, the cess is to be deducted on 5 crores and not one crore. Study the 'cost of construction' as contained in Rule 3 of the Cess Rules 1998.
Best wishes,
Jpratap
26th March 2010 From India, Chandigarh
Dear Manoj,
Please read the BOCW Act, 1996 and BOCW Rules, 1998 and understand the purpose, concept and scheme of the Act and then come up with specific questions at this forum and we would be happy to answer the queries. I am sure you would find many answers within the Act and the Rules.
Best wishes,
jpratap
2nd July 2010 From India, Chandigarh
Dear all,
Can any one tell about the pf and esic applicablility to construction unit. we are the principal employer give work contractor for construction but our staff are their 6 no to handle the core work. Is the pf and esic applicable. if applicable how to go about it. how to deduct the amount from the contractors bill if non production of document of wages by contractors.
Please do needful
Raju S
16th August 2010 From India, Pune
Re: Building and Other Construction Worker Act
Dear all,
Can any one tell about the pf and esic applicablility to construction unit. we are the principal employer give work contractor for construction but our staff are their 6 no to handle the core work. Is the pf and esic applicable. if applicable how to go about it. how to deduct the amount from the contractors bill if non production of document of wages by contractors.
Please do needful, reply on email or suggest on below mentioned phone no
Raju S

09923634912
16th August 2010 From India, Pune
Dear all

BOCW Welfare cess will be remitted to the concerned authority (state/Central) to appropriate BOCWW Board (As per act the Cess limit is Minimum of 1% and Maximum of 2% will be collected). The amount fixed is if the project duration is for within 1 year then 1% of Contract Value or if the Project duration is more than 1 year then the work done during the Financial Year. (My Project in Hyderabad was Rs. 150 crores, First Year I Paid Rs.39,00,000 for the work done for Rs. 39,00,00,000/- and for Second Year I Paid Rs.30,00,000/- for the work done for Rs. 30,00,00,000/-). As the same was done during the initial stage of enforcement of the act the authorities does not formed any checking provisions in their policies.

Presently after making Cess payment the BOCW Welfare commissioner the inspector duly appointed by the appropriate authority will come and inspect the relevant documents.

The concept of this act is to utilise the funds for the welfare of the construction workers, who will be issued with an Identity Card for those whoever worked continuously for 4 months duration on payment of Rs.50/- per head and for renewal of the same Rs. 12/- will be charged every year. (Here No construction worker will continuously work for more than 6 months and no one will stay in a particular locality for more than one project. Hence it is not practicable to the workforce to renew the same. But if the workmen having highly influencial then they can get the benefit of Free Medical benefits, Accidental Insurance, disability benefits, and to their nominees death benefits and for female workers Maternity leave and medical facilities will also be provided. (On papers)

Please do not disclose the secret of collecting the cess (it is collected mainly to bridge the difference due to deficit in the financial Budget upto certain level only).

The Payment of ESI is not applicable for the construction Industries.

BOCW Act is not applicable for the Factories or Industries registered under Factories Act and Mines Act.

With Warm Regards

S. Bhaskar

9099024667
10th December 2010 From India, Kumbakonam
Dear Bhaskar,
Could you please clarify what do you mean by "Please do not disclose the secret of collecting the cess (it is collected mainly to bridge the difference due to deficit in the financial Budget upto certain level only)" as suggested by you in the last few lines above.
Regards
jpratap
11th December 2010 From India, Chandigarh
Dear Mr. Pratap

As a matter of fact Will you justify that this fund generated will fully be utilised only for the welfare of Construction Workers Welfare purpose.

If so what is the percentage of work force is working in years together in one place. The I Card issued by the BOCWW Board is only on District level and not even in State level.

I am working in a reputed company as Asst manager (IR) and drawing a handsome amount of salary.

Eventhough I have no financial problem. But I am unable to visit to my previous place of work due to one other reason.

Do you think the workman whoever registered will be able to go and get the Renewal of registration every year

Do you think the workmen are sufficiently qualified to maintain the dates of renewal, being educated to keep them updated about the maintenance of requisite papers ready.

Hence the Funds regenerated by BOCWW Board may be on books on the records of Construction workers welfare utilisation but the purpose is only to bridge the gap arouse in the Deficit financial Budget.

With warm regards

S. Bhaskar

9099024667
12th December 2010 From India, Kumbakonam
Dear Mr. Bhaskar,
Please be clarified that the cess collected is retained by the State Building and other Construction Workers Welfare Board. It does not go to Government Exchequer at all; so the question of bridging the gap due to deficit in the financial budget of the government does not arise. On the contrary, like any other private construction, the government also has to pay cess to the Board on the construction work being carried by it.
Regards
jpratap
13th December 2010 From India, Chandigarh
Mr. J. Pratap,
Good contribution as far as understanding of BOCW Cess Act is concern. Wish to discuss with you in detail on this Cess Act. Can I have your Mobile number?
Regards,
Avadhut Deshpande
09922507608
13th December 2010 From India, Mumbai
Dear All,
I have a question?
If I am constructing 1 building out of big project of 10 building in Maharashtra. Then I have to make part payment or have to make payment against entire project.
Kindly clarify.
Thanks, AMIT - 9011481111
31st March 2017 From India, Pune
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