Does 'Building and Construction Work' Include Factory Equipment and Machinery?

Kindly let me know if the definition of building or other construction work includes the plants, machinery, and equipment erected in the factory, or merely the construction of the building.

All the activities carried out in the construction premises are covered under the BOCW Act. However, if the erection activities are carried out in a running plant or factory, they are not covered under the BOCW Act.

The construction work of our company started as early as 2007, and production commenced in March 2009. The concerned Labour Officer claims that the cess is liable to be paid not only on the construction of the various structures but also on the plant and machinery erected thereof.

Please send advice on whether the cess is liable to be paid only on the actual constructions carried out on the premises or if it is inclusive of the plant, machinery, and other equipment installed or erected.

Regards

As a matter of fact, the Factory Inspector himself is the BOCW Inspector in almost all states. Hence, this type of problem is arising. If you construct within the existing factory premises, then the principal employer has to obtain permission from the Factory Inspector. Thus, the same inspector will function as the BOCW Inspector as well and instruct you to pay the BOCW Cess in advance before commencing construction within the factory premises.

In your case, you have to pay the cess as per your Work Order. If the work order includes the installation of plants, machinery, and equipment, then you must pay for the same and claim reimbursement from the Principal Employer.

Kindly refer me to the judgments either from the High Courts or from the Supreme Court with reference to Section 2(d) of the BOCW Act, which deals with the definition of "Building or other construction." My main requirement is whether this definition includes the plant, machinery, and equipment installed and erected in the new factory.

Hi friends, kindly clarify whether plant and machinery are included in the construction cost as per the BOCW Act or not. It's urgent.

The work order would be for the erection of the plant and machinery. It will be in the contract. For example, if I construct a building and install an imported machine, I cannot include the cost of the imported machinery. I need to calculate cess only on the work done. The work done would be the bills submitted by the contractor. Only on that amount would cess be calculated.

Definition of Building and CESS Payment Queries

What is the correct definition of a building under this Act, and do we need to pay CESS on machines installed in the building for production?

1. If the factory was constructed between 2002 and 2007, do we need to pay CESS on this construction?
2. If we are paying 1% to Nagar Palika, do we also need to pay 1% CESS under the BOCW Act?
3. If new construction is ongoing in our factory and all employees are covered under EPF and ESIC, do we have to pay CESS in such conditions?
4. Do we need to pay CESS under the BOCW Act on new building electrical wiring, air conditioners, lights, and furniture, etc.?
5. Do we need to pay CESS under the BOCW Act on machinery installed for production in the same premises?

Please help on an urgent basis.

Thanks,

Piyush

Dear Piyush, please see the reply on the https://www.citehr.com/323969-bocw-act-rules-pg4.html thread. Furthermore, you are advised not to post the same query repeatedly; instead, you can send the question to our members.

Thank you.