Building And Other Construction Worker Act

Dear Sir,
Kindly let me know who is the responsible person to pay cess under the Building and Other Construction Worker's Welfare Cess Act,1996 and Rules 1998.
Thanks and Regards
Puttaraju.M

Dear MR. Putta raju
If any person carrying on the building or other construction work, liable to pay the cess under section 3, fails to furnish any return under sub-section (1), the officer or the authority shall give a notice requiring such person to furnish such return before such date as may be specified in the notice.
Satya

Dear Friends,

According to Section 3(1) of the Building and Other Construction Worker's Welfare Cess Act, 1996 (in brief the Cess Act), the cess is levied on the 'cost of construction' incurred by an employer.

The word 'employer' is not defined under the Cess Act; but according to section 2(d) of the Cess Act, the words and expressions used but not defined and defined in the Building and Other Construction Workers (RECS)Act, 1996 (in brief, the Main Act) shall have the meanings respectively assigned to them in that Act.

Under the Main Act, The word 'employer' is defined in section 2(1)(i) which says that in relation to an establishment, it means the owner thereof and include:-

(i)....... the authority or head of govt. deptt.;

(ii)....... the chief executive officer or authority of a local authority; and

(iii) in relation to a building or other construction work carried on by or through a contractor, or by the employment of building workers supplied by a contractor, the contractor.

In the ultimate analysis, therefore, for the purpose of payment of Cess, we have to construe that person as employer who has 'incurred the cost of construction'. Now, it would the easy to ascertain as to who is the real employer - whether a contractor or the owner. Even if the contractor pays according to his agreement with the owner, it is the owner from whom he gets reimbursement of the same. Hence, in my view, in real terms, the owner is the employer for the purpose of levy and collection of cess as per section 3(1) of the Cess Act.

Best wishes,

Jpratap

Mr. Jpratap,
It is very useful contribution towards labour welfare cess. Pls clarify one thing on this. A Subcontractor working under the main contractor is liable to pay labour welfare cess??? A sub contractor given hardly 10% scope of total construction getting payment directly from main contractor or promotor is liable to pay 1% labour welfare cess???? If it is liable to pay by way of deducting from the bills of subcontractor, shall the sub contractor be provided with any kind of certificate or challan copy for claiming Income tax exemption to the tune of cess amount????
Could you pls clear this.
T.Kumar
99400 85550
Chennai.

Dear Kumar,
Pls go through the definition of 'employer'. The opening lines says that it is the owner of an establishment. Hence, it is the owner who is to pay cess.
Deduction at source is done only in case of govt or PSUs etc. The employer i.e. the department shall deduct cess from the bills of the main contractor. The main contractor may have appointed several sub-contractors and he may deduct the same from their bills so that ultimately he gets the cess reimbursed which has been deducted from his bills.
Private owner has to pay the cess himself.
Contractor or sub contractor may ask for a certificate of deduction for income tax purpose.
Wishes
Jpratap

Almost all States and UTs, as the Hon'ble Supreme Court is monitoring its implementation.
Jpratap

Who is the authority to monitor or control or inspect the implementation of BOCW Act 1996 in the state of Maharashtra?. Is it any way connected with State Labour Department? May I get Office address of the authority for the Nagpur city.

I have a problem in this matter. In Orissa, here is a Govt project "Laying of pipe line" worth Rs 5 crore, of which 4 crore is cost of C.I. pipe and 1 crore is laying cost. Now from which amount I will deduct tax from contractors bill. From total 5 crore or from 1 crore(labour part)...Pls let me know...

Dear Ms. Shivani,

Greetings for the day:)

Please confirm about which state you wants to know that it is applicable or not??

Dear Mr. Barasat,

Greetings for the day :)


It will be deducted on 1 crore mentioned as laying cost