Is the BOCW Cess Applicable for Construction Inside Factories? Seeking Insights

Can anyone please share whether the BOCW Act/BOCW Cess is applicable for construction within the factory?

Regards

Please read the definition of 'building or other construction work' as defined under section 2(d) of the main Act. This definition does not include any building or any construction work to which the provisions of the Factory Act, 1948, or the Mines Act, 1952 apply. Therefore, the Act is not applicable to building or construction work in the precincts of factories and mines.

Since the main Act is not applicable to building or construction work in the precincts of factories and mines, Cess is not applicable to such building or construction work. I came across many incidences in which the authorities are demanding Cess for building or construction work in the precincts of factories. This is wrong and illegal.

Regards

Thank you for your valuable inputs. If management wants to barricade the construction area within the factory premises and declare that area as outside of the factory, is there any provision in the law?

Regards

If your management wants to declare the construction area outside the factory premises and come under the purview of the BOCW Act and pay the cess, who will object? Our government needs money from companies like yours.

Thank you.

Before anyone tells me that the cess money doesn't go to the government, I want to clarify that this money goes into the account of the board under the Act. A significant amount of money is held by every board.

There are the following points to be considered for BOCW Act applicability:

1) As per the ACT, “It applies to every establishment which employs, or had employed on any day of the preceding twelve months, ten or more building workers in any building or other construction work.”

2) Your company’s nature/scope of work is production, as per my understanding.

3) Hence, it is not applicable to your company.

4) You must have an agreement with an engineering construction company (who actually carries out the work).

5) So, as a principal employer, ask that company to maintain all registrations under this act.

6) Every month, take a photocopy of all registrations and maintain them at your end for record-keeping.

7) Please make sure to collect a photocopy of labor insurance from contractors.

Thanks,

Pramila

According to you, if the Act is not applicable, then why are you advising PE to maintain all the registers under the Act?

Dear seniors,

I discussed the matter with the Assistant Director of Factories, who is a cess collector in Punjab. He explained that if construction or expansion work is carried out within or outside the factory premises, CESS is payable in both cases because it is applicable based on the construction cost. While we are committed to ensuring statutory compliances, we are hesitant to pay any additional amount towards CESS.

Clarification on Construction and CESS

To clarify further:
- The current construction area falls within the factory premises.
- We possess an approved plot plan.
- Once the construction area is barricaded, we intend to utilize the same factory gate for labor entry.

Questions Regarding CESS Applicability

I have the following questions:
1. Is CESS applicable for expansions within the Factory?
2. If so, why is it mandatory? Could you specify the relevant section?
3. Is there a provision in the act to barricade an area within the factory and deem it as outside the factory premises?

Your cooperation is vital in ensuring compliance.

Thanks and Regards,
Sandeep Singh