I have recently read this. But I am sorry to say that the confusing question got a confusing answer. The questioner has intermingled the provisions of two Acts namely CLRA and BOCW and he received the confused answer. With humble submissions and with utmost respect, I am trying to explain the position:-
The employer's Cost to calculate labour Cess: As per section 3(1) of the BOCW Cess Rules, 1996, the cess is to be paid by an employer who incurs the cost of construction on the notified rate by the Central Government. Vide notificatin dt. 26.09.1996, the Central Govt stipulated the rate of cess as 1% of the cost of construction. Rule 3 of BOCW Welfare Cess Rules, 1998, states tht the cost of construction shall include all expenditure incurred by an employer in connection with the building or other construction work but shall not include the cost of land; any compensation paid or payable to the worker or his kin under the Workmen’s Compensation Act, 1923.
This virtually means that the cost of construction means the cost of project minus the cost of land. The cess has to be calculated and deposited on this amount.
As regards the liability to pay the cess, BOCW Welfare Cess Rules 1998 are very clear about this. In govt contracts, the cess is to be deducted from the bills of the contractors. For private builders, the same is to be paid at the time of approval of building plans (it is obvious that no contractor is involved at that time). The rest of calculations made by the questioner are meaningless in view of above.
The questioner has confused the matter with 20 or more persons which is a concept under CLRA and not under BOCW where the number of persons is 10 or more. In case of CLRA the Principal Employer (owner/employer) is required to get its establishment registered and the contractor to obtain licence if there are 20 or more workers but in BOCW, it is the owner who is to get its establishment registered except in the case of govt contractor, where he is included in the definition of employer and is required to get the establishment registered with the concerned Registering Officer.
The Department deducts 1% cess from our payments on account of BOCW cess.
Our agreement states, mainly Clause 19, heading "Labour Laws to be complied by the contractor" that we have to comply with "the provisions of the building and other construction worker (Regulation of employment and condition of service) Act, 1996 and the building and other construction Workers Welfare Cess Act, 1996."
The agreement is silent on the act(s) and/or it's provisions other than what is stated above.
What I need to do know is whether it is compulsory for us to get ourselves registered under both the acts?
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