BOCW cess

Question

BOCW cess

We undertake industrial construction work for various industries like power plant, refineries. We employ the workers for getting the job executed. My question is:

1) Are we as contractor responsible for paying the 1% cess or the owner of the plant?
2) The act says 1% of the cost to be deposited as BOCW. Are we to deduct the profit portion from the price and pay only 1% of the cost incurred by us?
3) If during the execution of the contract the owner agrees to pay us compensation for a delay in the project or for any other reason, then do we have to pay 1% cess on the compensation amount?
4) If there is Price Variation Clause (PVC) in the contract and if we are compensated for the variation in the prices, is the 1% cess applicable for the PVC amount?

Asked 8 years ago in Labour

Answer 1

You are liable to pay 1 per cent cess

2) BOCW Act and the Cess Act break new ground in that, the liability to pay cess falls not only on the owner of a building or establishment, but under Section 2(1)(i)(iii) of the BOCW Act 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

3) The Statement of Objects and Reasons to the Cess Act noted that the intention was to provide for the levy and collection of a cess on the cost of construction incurred by the employers for augmenting the resources of the Building and Other Construction Workers Welfare Boards constituted by the State Governments under the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Ordinance, 1995

4) you have to pay cess on compensation received for delay in the project

5) it would be applicable on PVC amount

Ajay Sethi

Advocate, Mumbai

Available Now

99775 Answers

8145 Consultations