Who Pays the Cess Under the Building & Other Construction Workers Welfare Act?

Dear Sir,

Please confirm who is responsible to pay the Cess to the authorities under the Building & Other Construction Workers Welfare Cess Act, 1996 — whether the principal employer, the contractor, or the subcontractor. Also, clarify if the act is applicable when the construction and commissioning of the factory are in progress and the entity is not registered under the Factories Act.

Please confirm.

Gaurav Saini

Please confirm who is responsible to pay the Cess to the authorities under the Building & Other Construction Workers Welfare Cess Act, 1996: whether the principal employer, the contractor, or the subcontractor. Is the act applicable when the construction and commissioning of the factory are in progress, and the facility is not registered under the Factories Act.

The principal employer will be liable to pay the cess amount if the contractor or subcontractor fails to submit the required amount. The principal employer can recover that amount from the contractor's bill.

Regards,
Nikhil Gupta
Voltas Ltd.

I think the responsibility for payment of cess lies with the building owner. However, if the work is carried out through a contractor by engagement of building workers coming under the definition of Building and Other Construction Workers' (Regulation of Employment and Conditions of Service) Act, 1996, the contractor shall pay the cess.

Regards,
Madhu.T.K

As I have gone through the above-mentioned material, nowhere is the meaning of the employer defined. Please help to define the meaning of "Employer" in the Welfare Cess Act, 1996 as effective in Uttar Pradesh.

So far as the BOCW Act is concerned, the legislature has given a very wide definition of an Employer. The definition includes Contractor, and the definition of Contractor includes Sub-contractor. In view of this, a sub-contractor may also take registration and pay cess under the Cess Act.

Few states like Karnataka have framed rules wherein PSUs should register under the BOCW Act and pay cess by deducting from the bills raised by the Contractors.

The BOCW Act will be applicable when the construction and commissioning of the factory are in process, and the same is not registered under the Factories Act.

Regards

Construction Workers Welfare Boards

Construction Workers Welfare Boards were formed by each State Government as per the Act passed in 1996. Every state has its own norms. In Tamil Nadu, the board formed the rules as follows. The departments have to appropriate a certain percentage fixed by the board (say 1% or so), and it should be transferred by the departments concerned to the Construction Workers Welfare Board. For private constructions, the prospective persons or companies undertaking the construction should take a Bank Demand Draft in favor of the Chairman of the Construction Welfare Board along with their application for a building permit based on the provisional cost. This has led to positive collections for the board, enabling them to provide welfare measures for the workers.

Instead of EPF or ESI for the workers, this is more helpful for them. The workers are also able to receive benefits without any hassle. It also reduces Inspector Raj.