Let’s proceed to understand the provision with regard to the applicability and the liability of payment of Cess under the Act. Relevant for the purpose would be the following:
• Section 2 (i) of The Building And Other Construction Workers (Regulation Of Employment And Conditions Of Service) Act, 1996, defines “employer” as:
“employer", in relation to an establishment, means the owner thereof, and includes,-
(i) in relation to a building or other construction work carried on by or under the authority of any department of the Government, directly without any contractor, the authority specified in this behalf, or where no authority is specified, the head of the department;
(ii) in relation to a building or other construction work carried on by or on behalf of a local authority or other establishment, directly without any contractor, the chief executive officer of that authority or establishment;
(iii) in relation to a building or other construction work carried on by or though a contractor, or by the employment of building workers supplied by a contractor, the contractor;
• Section 2 (g) of The Act, defines “contractor” as:
"contractor" means a person who undertakes to produce a given result for any establishment, other than a mere supply of goods or articles of manufacture, by the employment of building workers or who supplies building workers for any work of the establishment; and includes a sub-contractor;
• Section 7 of the Act, provides for registration of establishment
Registration of establishments.-
(1) Every employer shall,-
(a) in relation to an establishment to which this Act applies on its commencement, within a period of sixty days from such commencement; and
(b) in relation to any other establishment to which this Act may be applicable at any time after such commencement, within a period of sixty days from the date on which this Act becomes applicable to such establishment, make an application to the registering officer for the registration of such establishment:
Provided that the registering officer may entertain any such application after the expiry of the periods aforesaid, if he is satisfied that the applicant was prevented by sufficient cause from making the application within such period.
(2) Every application under sub-section (1) shall be in such form and shall contain such particular and shall be accompanied by such fees as may be prescribed.
(3) After the receipt of an application under sub-section (1), thc registering officer shall register the establishment and issue a certificate of registration to the employer thereof in such form and within such time and subject to such conditions as may be prescribed.
(4) Where, after the registration of an establishment under this section, any change occurs in the ownership or management or other prescribed particulars in respect of such establishment, the particulars regarding such change shall be intimated by the employer to the registering officer within thirty days of such change in such form as may be prescribed.
• To be read with Section 3 of the The Building And Other Construction Workers’ Welfare Cess Act, 1996
Levy and collection of cess.—(1) There shall be levied and collected a cess for the purposes of the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996, at such rate not exceeding two per cent, but not less than one per cent, of the cost of construction incurred by an employer, as the Central Government may, by notification in the Official Gazette, from time to time specify.
(2) The cess levied under sub-section (1) shall be collected from every employer in such manner and at such time, including deduction at source in relation to a building or other construction work of a Government or of a public sector undertaking or advance collection through a local authority where an approval of such building or other construction work by such local authority is required, as maybe prescribed.
(3) The proceeds of the cess collected under sub-section (2) shall be paid by the local authority or the State Government collecting the cess to the Board after deducting the cost of collection of such cess not exceeding one per cent, of the amount collected.
(4) Notwithstanding anything contained in sub-section (1) or sub-section (2), the cess leviable under this Act including payment of such cess in advance may, subject to final assessment to be made, be collected at a uniform rate or rates as may be prescribed on the basis of the quantum of the building or other construction work involved.
COMMENTS
For the purposes of the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 (27 of 1996), a cess at the rate of one percent, of the cost of construction incurred by the employer is to be levied and collected, vide S.O. 2899, dated 26th September, 1996.
I purpose to converge on the following to discuss further:
(1) Cess is applicable on entire cost of the works[ generally contractor is not entrusted with the works equal to all the costs of the works] meaning thereby he can’t be burdened with payment of Cess on that part of the total costs of the works not assigned to it, therefore, it is the principal / owner who is the best point to levy Cess to achieve the objectives;
(2) There can’t be levying of Cess at different levels for the same works. i.e. it is either of the Principal or the Contractor or the Sub-Contractor/s who can be levied with Cess, not two or all of them;
(3) The Enactments needs amendments with regard to the fixation of liability at the individual level of owner, contractor an sub-contractors