Building Workeres Welfare Cess

Hi,
I want to clarify that As per building and other construction workers welfare cess act 1996 who will pay the 1% of the cess amount on total contract value
It is employer or contractor

Dear
The cess under the BOCW Cess Act, 1996 is to be collected from the employer & for the definition of the employer you may go through section 2(i) of the BOCW(RE&CS) Act, 1996.
Regards,
R.N.Khola

As per definition of employer under section 2 (i) of the BOCW (RE&CS) ACT, 1996, EMPLOYER includes contractor also with regard to the contract labout. please clarify if we hire a contractor and that contractor hire sub-contractor than, the sub-contractor is liable to pay the cess. IS IT SO OR NOT PLEASE CLARIFY?
Further, please clarify on what amount the cess is payable i.e, on the cost of construction or it includes the cost of machinery & other things which are to be erected & commissioned

Dear Syam_1230,

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)

Dear All,
I am working a Hotel as HR Manager , It was establishment in 2014-15 and it is at RICCO area so we had got NOC from RICCo. But i got a notice from labour department regarding BOCW/CESS Taxes after 04 year to opening the property. So kindly suggest me about the procedure and other thinks also. It is applicable or not ? or labour contractor . Witch cost will include in taxes BOCW /Cess .