BOCW Cess

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Wish You a Happy May Day-2017

Following three industries where normally unskilled manpower are being deployed

·         Construction Industries –Applicable act is BOCW Act, 1996

·         Manufacturing Industries – Applicable act is Factories Act

·         Mining Industries – Applicable act is Mines Act

Now, let us discuss about BOCW act. It is short form of Building and Other Construction Workers' Welfare Cess Act, 1996

Normally in construction Industries, we used to follow the Contract Labour Act, 1971, and we take Labour License before commencement of Construction Job. In that Act, normally the details are given about the Contract Workforce, Obtaining Labour License Procedure, Welfare Measures, and all about the contract Workmen. The Government felt that the act is not having the uniqueness.

 

Hence in 1996, Indian government introduced the Building & Other Construction Workers Act, (in Short, BOCW Act), BOCW Rules and BOCW Welfare Cess Act, In BOCW Act & Rules it has given the direction about the Welfare measures to Workmen, Safety Precautions and many Technical Aspects about the Tools, Tackles, Instruments, Machineries, Lifting Appliances, its maintenance, inspection, etc. Medical Facilities required to be given to the injured workmen, Periodical Medical Checkup for drivers, operators, food handlers, etc., Pre-employment Medical Checkup for every workmen.

In this Act, for implementation purpose the Government needs fund. So they implemented the BOCW Welfare Act, which made the provision to collect 1% minimum and Maximum of 2% of the Cost of Construction / Works carried out during the Financial Year to be paid as BOCWW Cess to the BOCWW Cess Board.

Some of the Key Points are below.

·         Cess came into force on 26th March, 1998

·         This act is applicable immediately on commencement of Job

·         The Principal Employer and the contractors, both are liable for this Cess

·         The responsibility of Principal Employer to make the payment of Cess.

·         The BOCW Cess is payable to the Government (BOCW Welfare Commissioner of State)

·         Cess rate not exceeding two percentage, but not less than one percentage of the cost of construction incurred by an employer.

·         Cess shall not include the Cost of land and any compensation paid or payable to a worker or his kin under the Workmen's Compensation Act. 1923.

·         BOCW act does not include any building or other construction work to which the provisions of the Factories Act, 1948 (63 of 1948), or the Mines Act, 1952 (35 of 1952), apply.

·         Cess is not refundable in any case. However, the amount of compensation paid to the workers during that year, can be deducted from the Cess payable.

·         Cess shall be paid by an employer,

o   If the project duration is less than a year, within thirty days of completion of the construction project or within thirty days of the date on which assessment of Cess payable is finalised, whichever is earlier, to the Cess collector.

o   If the duration of the project or construction work exceeds one year, Cess shall be paid within thirty days of completion of one year from the date of commencement of work and every year thereafter at the notified rates on the cost of construction incurred during the relevant period.

·         Once Factories Act is implemented there the BOCW act will get ceased.

·         Once the Factory fencing is made excluding the expansion project then Factories Act is not applicable and only BOCW will be applicable to that expansion project.

·         If Construction area falls within the factory premises then BOCW Act cannot be applicable and only Factories Act will be applicable.

·         For Registration under BOCW Act is exempted for those who got covered by Factories Act and Mines Act and the construction work carried out for self and the cost is within 10 Lakhs.

·         Generally ESI Coverage is not applicable for Construction Industries and not for BOCW Act. But if your construction Activities are being done in the premises of Factories or your principal employer is covered under ESI, then obviously you also required to make payment of ESI as 1.75% Employee Share and 4.75% Employer Share.

The above views are my personal views from the study which I have made on this subject. There is a need to take up the ambiguities in this entire enactment