1. Can the cess, not collected earlier by the owner (say a PSU) from the contractor's running bills still be collected from the subsequent/final bills?
If yes, is the contractor justified in going to court/arbitration esp when at the time of tendering for the work, there was no mention of such deduction in the Notice Inviting Tender (NIT)?
From India, Faridabad
If yes, is the contractor justified in going to court/arbitration esp when at the time of tendering for the work, there was no mention of such deduction in the Notice Inviting Tender (NIT)?
From India, Faridabad
Pls go through the allotment of work contract carefully. I am sure there must be a clause like that the contractor will abide by the all existing labour laws. Cess Act is on the statute book since 1996 and, therefore, must be existing on the day when work was allotted.
Best wishes,
Jpratap
From India, Chandigarh
30Best wishes,
Jpratap
From India, Chandigarh
Dear
We are also to examine that who is responsible for depositing the amount of cess. If contractor does not fall within the category of employer then why he should pay.If yours is a PSU unit then you must be having Law Officer.First ask him to go through the BOCW Cess Act,1966 & let him give his advise on who is responsible for deposit of cess? Then go through the agreement. What it says & take action accordingly.
Regards,
R.N.Khola
(Labour Law & Legal Consultants)
09810405361
From India, Delhi
We are also to examine that who is responsible for depositing the amount of cess. If contractor does not fall within the category of employer then why he should pay.If yours is a PSU unit then you must be having Law Officer.First ask him to go through the BOCW Cess Act,1966 & let him give his advise on who is responsible for deposit of cess? Then go through the agreement. What it says & take action accordingly.
Regards,
R.N.Khola
(Labour Law & Legal Consultants)
09810405361
From India, Delhi
Dear
Please go through sub-rule (3) of rule 4 of the Cess Rules, 1998. It is the responsibility of a PSU to deduct cess from the bills of the contractor and pass it on to the State Welfare Board. In case it fails, it may have to pay from its own pocket. On the completion of the project, the assessment will be made and the Assessing Officer will require you to deposit the remaining 1% of cess on the total cost of construction of the project. In case you have not deducted, you can imagine - the interest is 2% p.m. and the penalty is 100% of the unpaid cess amount.
I think, you should proceed to deduct.
Best of luck
Jpratap
From India, Chandigarh
Please go through sub-rule (3) of rule 4 of the Cess Rules, 1998. It is the responsibility of a PSU to deduct cess from the bills of the contractor and pass it on to the State Welfare Board. In case it fails, it may have to pay from its own pocket. On the completion of the project, the assessment will be made and the Assessing Officer will require you to deposit the remaining 1% of cess on the total cost of construction of the project. In case you have not deducted, you can imagine - the interest is 2% p.m. and the penalty is 100% of the unpaid cess amount.
I think, you should proceed to deduct.
Best of luck
Jpratap
From India, Chandigarh
Dear SHAHI, Yes, it is also applicable to Private Ltd. company. With Regards, R.N.Khola
From India, Delhi
From India, Delhi
Dear Friend, No, Establishment covered under Factories Act are expressely excluded from this Act. Regards
From India, Vadodara
From India, Vadodara
Dear Friends,
You have to pay cess on construction of a factory building - may be new or an extention; BOCW Act is applicable until the Factories Act, 1948 becomes applicable which happens only when the occupier gives a notice to the Factory Inspector of his intention to resume the building to be used as Factory. The premises is then inspected and Licence under Factories Act issued. Till then, BOCW Act, 1996 remains applicable. Hence, in this situation, one cannot escape the payment of Cess.
In this context you may also view the Judgment of the Hon'ble High Court reported in Labour Law Reporter " 2010 LLR MP HC 165
Wishes,
Jpratap
From India, Chandigarh
You have to pay cess on construction of a factory building - may be new or an extention; BOCW Act is applicable until the Factories Act, 1948 becomes applicable which happens only when the occupier gives a notice to the Factory Inspector of his intention to resume the building to be used as Factory. The premises is then inspected and Licence under Factories Act issued. Till then, BOCW Act, 1996 remains applicable. Hence, in this situation, one cannot escape the payment of Cess.
In this context you may also view the Judgment of the Hon'ble High Court reported in Labour Law Reporter " 2010 LLR MP HC 165
Wishes,
Jpratap
From India, Chandigarh
I have seen the MP HC judgment of Gannon dunkerly, howvere same is vague & does not explain why Cess is payable for bldgs. under Factories Act.
If the definition excludes bldgs. under Factories Act then what would be exempted?
If we are only expanding at existing site where Factory is running & the expanded bldg. will also be covered under Factories Act then under BOCW CEss Act HOW are we liable to pay? How would you interpret the exclusion from definition?
You said "occupier gives a notice to the Factory Inspector of his intention to resume the building to be used as Factory' Kindly clarify.
Thanks!
From India, Patiala
If the definition excludes bldgs. under Factories Act then what would be exempted?
If we are only expanding at existing site where Factory is running & the expanded bldg. will also be covered under Factories Act then under BOCW CEss Act HOW are we liable to pay? How would you interpret the exclusion from definition?
You said "occupier gives a notice to the Factory Inspector of his intention to resume the building to be used as Factory' Kindly clarify.
Thanks!
From India, Patiala
Hello dear,
Repair and maintenance are also covered within the meaning of 'building and other construction work' as per section 2(d) of the BOCW Act. This is what is exempted if it happens within a factory.
Can you call a 'Building Worker' a 'Worker' under the Factories Act? Look at the activities he is doing. He essentially fits into the definition of a building worker as per section 2(e) of BOCW Act. Factory workers necessarily have to be associated with the manufacturing process. When a factory is being built, where is the manufacturing happening?
According to me one should try to find logic and not lacuna behind any legislation. The purpose of exclusion could be to avoid two set of rules regarding workers safety, working hours and other welfare measures etc. The same are also available in 1948 Act as well as 1996 Act. The object of both the Acts is to ensue health, safety and welfare of workers while they are at work. If BOCW Act is to be made applicable in a Factory on the activities of building and construction instead of manufacturing activity, then which rules you would follow. It is for this purpose that the BOCW is not made applicable to building and other construction work where the provisions of the Factories Act apply.
Then there are judgments by Apex Court of this country according to which the 'factory' is limited to the area where the manufacturing process is carried on. Thus, an office within the precincts of a factory is not included in the definition of factory.
U/s 7 of the Factories Act, 1948, the occupier has to give at least 15 days notice to the Inspector before he occupies the premises to be used as factory.
Regards and wishes
Jpratap
From India, Chandigarh
Repair and maintenance are also covered within the meaning of 'building and other construction work' as per section 2(d) of the BOCW Act. This is what is exempted if it happens within a factory.
Can you call a 'Building Worker' a 'Worker' under the Factories Act? Look at the activities he is doing. He essentially fits into the definition of a building worker as per section 2(e) of BOCW Act. Factory workers necessarily have to be associated with the manufacturing process. When a factory is being built, where is the manufacturing happening?
According to me one should try to find logic and not lacuna behind any legislation. The purpose of exclusion could be to avoid two set of rules regarding workers safety, working hours and other welfare measures etc. The same are also available in 1948 Act as well as 1996 Act. The object of both the Acts is to ensue health, safety and welfare of workers while they are at work. If BOCW Act is to be made applicable in a Factory on the activities of building and construction instead of manufacturing activity, then which rules you would follow. It is for this purpose that the BOCW is not made applicable to building and other construction work where the provisions of the Factories Act apply.
Then there are judgments by Apex Court of this country according to which the 'factory' is limited to the area where the manufacturing process is carried on. Thus, an office within the precincts of a factory is not included in the definition of factory.
U/s 7 of the Factories Act, 1948, the occupier has to give at least 15 days notice to the Inspector before he occupies the premises to be used as factory.
Regards and wishes
Jpratap
From India, Chandigarh
Dear Friend,
In addition to the opinion given by the Jpratap, i would like to add and clear that wherein the Factroy Licence has been taken the factory got exempted from the BOCW Act, the intention of the BOCW Act is to cover the unorganised sector like the Building workers and provide them the umbrella of Safety, Health & Welfare as rightly said by Jpratap. The moment the Factory Act applicable on the premises it will override all other Acts related to safety, welfare and health.
Regards
From India, Vadodara
In addition to the opinion given by the Jpratap, i would like to add and clear that wherein the Factroy Licence has been taken the factory got exempted from the BOCW Act, the intention of the BOCW Act is to cover the unorganised sector like the Building workers and provide them the umbrella of Safety, Health & Welfare as rightly said by Jpratap. The moment the Factory Act applicable on the premises it will override all other Acts related to safety, welfare and health.
Regards
From India, Vadodara
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4.THE BUILDING AND OTHER CONSTRUCTION WORKERS' WELFARE CESS ACT, 1996.doc
Building-and-ot her-constructio n-workers-act-1 996.pdf