Our company is a state power transmission company. Apart from our own line construction work, we undertake line construction work (on turnkey basis) of our clients also.
We outsource the line construction work undertaken from our client to our contractors. So the proposition comes as under :
Customers---------->our company ----------------> contractor
for the construction of work, we charge estimated amount from our customer and alongwith construction cost, we also recover 1% BOCW cess. The recovered BOCW cess is remitted to BOCW Board.
We then outsource the "construction portion" of total work to contractor and for "material portion", we procure materials. As the work progresses, the contractor submits the bills. From the bill of contractor, we deduct 1% BOCW cess and remit the same to BOCW Board.
Our Queries are as under :-
(i) Is the above process of recovering cess from customer and deducting cess from contractor's bill correct ?
(ii) Who is employer in the case liable to collect cess
From India, Faridabad
We outsource the line construction work undertaken from our client to our contractors. So the proposition comes as under :
Customers---------->our company ----------------> contractor
for the construction of work, we charge estimated amount from our customer and alongwith construction cost, we also recover 1% BOCW cess. The recovered BOCW cess is remitted to BOCW Board.
We then outsource the "construction portion" of total work to contractor and for "material portion", we procure materials. As the work progresses, the contractor submits the bills. From the bill of contractor, we deduct 1% BOCW cess and remit the same to BOCW Board.
Our Queries are as under :-
(i) Is the above process of recovering cess from customer and deducting cess from contractor's bill correct ?
(ii) Who is employer in the case liable to collect cess
From India, Faridabad
Dear friend,
I would like you to go through the definitions of the terms "employer" and "establishment" defined respectively u/s 2 (1) (i) and 2 (1) (j )of the BOCW Act,1996 and the time and manner of collection of cess stipulated under rule 4 of the BOC W Welfare Rules 1998.
A combined reading of all the above provisions would affirm the correctness of the practice of deducting cess proportionately from the contractors' bills.
Though your second question seems to be a moot one, the applicability of the terms "employer" and "establishment" to both the person for whom the construction work is carried out and the contractor who undertakes the work makes both responsible for the remittance of the cess. To be more specific on this moot point, my personal opinion on ultimate responsibility to collect and remit revolves around fixing the person for whom the construction work is done in view of the extended application of the provision under rule 4(3) for deduction from the bills in respect works pertaining to Public Sector and Govt Undertakings to others also and the provision under rule 4(5) of the 1998 Rules for advance payment of cess based on the estimated calculation of construction.
From India, Salem
5967I would like you to go through the definitions of the terms "employer" and "establishment" defined respectively u/s 2 (1) (i) and 2 (1) (j )of the BOCW Act,1996 and the time and manner of collection of cess stipulated under rule 4 of the BOC W Welfare Rules 1998.
A combined reading of all the above provisions would affirm the correctness of the practice of deducting cess proportionately from the contractors' bills.
Though your second question seems to be a moot one, the applicability of the terms "employer" and "establishment" to both the person for whom the construction work is carried out and the contractor who undertakes the work makes both responsible for the remittance of the cess. To be more specific on this moot point, my personal opinion on ultimate responsibility to collect and remit revolves around fixing the person for whom the construction work is done in view of the extended application of the provision under rule 4(3) for deduction from the bills in respect works pertaining to Public Sector and Govt Undertakings to others also and the provision under rule 4(5) of the 1998 Rules for advance payment of cess based on the estimated calculation of construction.
From India, Salem
Thanks for the input.
However to be specific my query is - whether recovering cess from customer we undertake contract work from them is correct or not.
Don't you think that there is double recovery and payment of cess - first time from our customer and second time from sub-contractors bill (for the same work outsourced to sub-contractor)
From India, Faridabad
However to be specific my query is - whether recovering cess from customer we undertake contract work from them is correct or not.
Don't you think that there is double recovery and payment of cess - first time from our customer and second time from sub-contractors bill (for the same work outsourced to sub-contractor)
From India, Faridabad
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BOCW NOTIFICATION FOR CESS BY DELHI Government.pdf
Labour Welfare Cess Reg Application-FOR MET.docx