Is the 1% Deduction Under BOCW Act Applicable to Our RMC Subcontractor? Seeking Advice

Dear Sir,

The EPC contractor is constructing a power plant. The contract has a subcontract with an RMC company to provide ready-mix concrete within the construction site. The construction site is registered under the BOCW Act. The subcontractor has installed a batching plant inside the construction site, using construction power (chargeable basis), and has already obtained a labor license under the labor commissioner's office. The raw material aggregate is supplied by the contractor. The batching plant is operating within the construction site, and the produced concrete is being used for this particular site. The subcontractor is not registered under the Factory Act either.

Kindly suggest if the deduction of 1% under the BOCW Act is applicable to the RMC company. The subcontractor is invoicing under HSN Code 38245010. Please advise.

Applicability of 1% Deduction under BOCW Act to RMC Company

In the scenario described, where the RMC company is providing ready mix concrete within a construction site registered under the Building and Other Construction Workers (BOCW) Act, the deduction of 1% under the BOCW Act is typically applicable. Here's a breakdown of the key considerations:

- The BOCW Act mandates a cess of 1% on the cost of construction incurred by an employer. This cess is utilized for the welfare of construction workers.
- Since the construction site is registered under the BOCW Act and the subcontractor is engaged in construction-related activities by providing concrete for the project, the 1% deduction would generally apply.
- The fact that the batching plant is located within the construction site and the concrete produced is specifically used for the same project further supports the applicability of the deduction.
- It is important to ensure compliance with labor laws and regulations, including obtaining the necessary licenses and adhering to the requirements set forth in the BOCW Act.

Recommendation

1. Verify the specific provisions of the BOCW Act in India to confirm the applicability of the 1% deduction in this context.
2. Consult with legal counsel or a labor law expert to ensure accurate interpretation and compliance with relevant laws.
3. Maintain proper documentation and records of payments and deductions related to the BOCW Act for transparency and audit purposes.

By following the appropriate legal guidelines and fulfilling the obligations under the BOCW Act, the RMC company can ensure compliance with labor laws and contribute to the welfare of construction workers as intended by the legislation. 🏯