Our company has been engaged in the construction work of buildings in Renusagar, Uttar Pradesh, but the work is being carried out outside the factory premises. Do we need to deposit the 1% cess as prescribed? Please suggest.
Regards,
Kunal
From India, Mumbai
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1Regards,
Kunal
From India, Mumbai
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The BOCW Act is applicable to your construction site, and you are liable to pay the cess at 1%. I take a stand that the cess is payable by the Principal Employer. This is because:
- The assessment of cess is done based on the total construction cost (excluding land cost and compensation paid/payable under WC) and not on the basis of contractors' billing.
- The information to be furnished to the assessment officer in 'Form I' is done by the Principal Employer and not by the Contractor(s). The assessment order is passed based on this information in 'Form I'.
However, the Principal Employer can recover the cess amount from the contractor's billing if it is provided in the agreement signed by both parties.
Judgments on the Issue
I am quoting two different judgments on this issue as under:
1. It will be the liability of the contractor and not the principal employer to pay welfare cess in respect of workers working at the site under the Building and Other Construction Workers Welfare Cess Act 1996.
M/s. Gannon Dunkerley & Co. Ltd. vs. State of Madhya Pradesh and Others. 2010 LLR 184 (MP HC)
2. It will be the owner and not the contractor of this establishment who will be responsible to pay Cess under Building & Other Construction Workers (RE&CS) Act.
Adani Agri Logistics Limited and Another vs. The State of Haryana and Others. 2010 LLR 752 (Punjab & Haryana HC)
You need to make a decision on it.
Thanks with regards.
Regards,
Keshav Korgaonkar
http://www.shantadurgaent.com - Insurance Advisors, Corporate Advisors, Legal Advice, Wage and salary, Labour Compliance Audit, SSI registration, NOC from
From India, Mumbai
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- The assessment of cess is done based on the total construction cost (excluding land cost and compensation paid/payable under WC) and not on the basis of contractors' billing.
- The information to be furnished to the assessment officer in 'Form I' is done by the Principal Employer and not by the Contractor(s). The assessment order is passed based on this information in 'Form I'.
However, the Principal Employer can recover the cess amount from the contractor's billing if it is provided in the agreement signed by both parties.
Judgments on the Issue
I am quoting two different judgments on this issue as under:
1. It will be the liability of the contractor and not the principal employer to pay welfare cess in respect of workers working at the site under the Building and Other Construction Workers Welfare Cess Act 1996.
M/s. Gannon Dunkerley & Co. Ltd. vs. State of Madhya Pradesh and Others. 2010 LLR 184 (MP HC)
2. It will be the owner and not the contractor of this establishment who will be responsible to pay Cess under Building & Other Construction Workers (RE&CS) Act.
Adani Agri Logistics Limited and Another vs. The State of Haryana and Others. 2010 LLR 752 (Punjab & Haryana HC)
You need to make a decision on it.
Thanks with regards.
Regards,
Keshav Korgaonkar
http://www.shantadurgaent.com - Insurance Advisors, Corporate Advisors, Legal Advice, Wage and salary, Labour Compliance Audit, SSI registration, NOC from
From India, Mumbai
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4.THE BUILDING AND OTHER CONSTRUCTION WORKERS' WELFARE CESS ACT, 1996.doc
Building-and-ot her-constructio n-workers-act-1 996.pdf