i want to know what is the meaning of employer cost to calculate labour cess and who is liable to pay client or contractor and when a contractor is liable to get labour licences if a contractor has less than 20 labour he is liable or not and if an employer get construct his building on labour rate how much is the liability of labour cess on the whole project or only on the labour component in case employer employ a contractor who has less than 20 labour is the employer is liable to get registered
From India , Delhi
Dear Srijan and Jitendersyadav,

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.



From India , Chandigarh
I am a registered contractor of a Govt. local body (like MCD, NDMC) of New Delhi.
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?

From India , Delhi
Yes. In view of the said clause in your agreement, not only the provisions of the BOCW Act, 1996 and Contract Labour Act, 1970 are to be complied with but the provisions of other applicable labour laws will also have to be adhered to by you.
Best wishes,

From India , Chandigarh

If you are knowledgeable about any fact, resource or experience related to this topic - please add your views using the reply box below. For articles and copyrighted material please only cite the original source link. Each contribution will make this page a resource useful for everyone.

Please Login To Add Reply →

About Us Advertise Contact Us
Privacy Policy Disclaimer Terms Of Service

All rights reserved @ 2021 Cite.Co™

All Material Copyright And Trademarks Posted Held By Respective Owners.
Panel Selection For Threads Are Automated - Members Notified Via CiteMailer Server