2. CONTENT OF THE PRESENTATION
PREPARED BY
INDAPURKAR & MUNDADA
CHARTERED ACCOUNTANTS
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01 . Introduction to the Act
02. Purpose of the Act
03. Applicability of the Act
04. Why DDRCS unit is liable for Labour Cess ?
05. Consequences of Delay / Failure in payment of Cess
06. Penalties
3. 01. INTRODUCTION TO THE ACT
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A . Why the act was introduced ?
Rapid development of construction owing to the
needs of better public infrastructure developments.
B. What is the Act ?
The name of the applicable act is Building & Other
Construction Workers [ Regulation of Employment and
Conditions of Service ] Act , 1996 i.e., BOCW Act
specifies the BUILDING & OTHER CONSTRUCTION
WORKERS WELFARE CESS ACT , 1996 generally
known as CESS ACT , 1996.
4. 02. PURPOSE OF THE ACT
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A. The purpose is
To collect the Cess on Cost of construction
incurred , for use of the Welfare of
Construction workers who are registered
with the respective act.
5. 03. APPLICABILITY
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A. The act is applicable to every Establishment
employing ten or more than ten Building
Workers
B. In any Building or Construction work
C. Anytime during the preceding Twelve Months
D. Cess act prescribes payment of Cess @ 01.00%.
6. 03. APPLICABILITY
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Who is the Contractor as per the act ?
01. Contractor is the person who undertakes to produce a
given result for any establishment
02. Other than supply of goods or articles of manufacture
03. By employment of building workers or who supplies
building workers for any work of establishment
04. Includes a Sub – Contractor
7. 04. Why DDRCS are liable for Labour Cess?
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CHARTERED ACCOUNTANTS
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Section 03 of CESS ACT does not specifically state
as to whether Cess is required to be paid by owner
or the contractor for the particular establishment.
However, in the case of Delhi Metro Rail
Corporation , it has been held by High Court that
there is nothing wrong in deduction of amount of
cess from bills of contractors.
8. 04. Why DDRCS are liable for Labour Cess?
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INDAPURKAR & MUNDADA
CHARTERED ACCOUNTANTS
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There can be deduction of Cess at source without
prior assessment so long as it remains adjustable
against final liability that may be determined at the
end of the assessment.
And this is the reason the DDRCS units should
deduct the amount of Labour Cess @ 01 % from the
bills raised by the contractor.
9. 05. Consequences for Delay in Payment
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A. If any employer fails to pay any amount of cess
payable under Section 3 within the time specified in
the order assessment, such employer shall to pay
interest on the amount to be paid at the rate of
two per cent every month or part of a month
comprised in the period from the date on which such
payment is due till such amount is actually paid.
10. 06. PENALTIES
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CHARTERED ACCOUNTANTS
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A. Whoever contravenes the provisions of any rules
under BOCW Act shall be punishable with :
1. imprisonment for a term which may extend to
three months,
2. or with fine which may extend to two thousand
rupees, or with both,
11. 06. PENALTIES
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B. And in the case of a continuing contravention,
with an
1. additional fine which may extend to one
hundred rupees for everyday during which such
contravention continues after conviction for the first
such contravention.
12. SUMMARY
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INDAPURKAR & MUNDADA
CHARTERED ACCOUNTANTS
12
We have overviewed the
exhaustive summary of
Labour Cess in this session.
Thank you for the kind attention.
