Building and other construction works (bocw) compliance

CA. Brijesh Baranwal (CA Practice) (4681 Points)

20 January 2013

Building and Other Construction Works (BOCW) COMPLIANCE

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

Cess is payable at 1% on cost of construction which includes all expenditure incurred by an employer in connection with the building or other construction work excluding;

(i) cost of land and

(ii) any compensation paid or payable to a worker or his kin under the Employees Compensation Act 1923.

Cess is non refundable.

Some relevant laws in this regard are as follows;

BOCW ACT, 1996

Section 7 (4)

Where, after the registration of an establishment under this section, any change occurs in the ownership or management or other prescribed particulars in respect of such establishment, the particulars regarding such change shall be intimated by the employer to the registering officer within thirty days of such change in such form as may be prescribed.

Section 15

Every employer shall maintain a register in such form as may be prescribed showing the details of the employment of beneficiaries employed in the building or other construction work undertaken by him and the same may be inspected without any prior notice by the Secretary of the Board or any other officer duly authorised by the Board in this behalf.

Section 16

(1) A building worker who has been registered as a beneficiary under this Act shall, until he attains the age of sixty years, contribute to the Fund at such rate per mensem, as may be specified by the State Government, by notification in the Official Gazette and different rates of contribution may be specified for different classes of building workers :

Provided that the Board may, if specified that a beneficiary is unable to pay his contribution due to any financial hardship, waive the payment of contribution for a period not exceeding three months at a time.

(2) A beneficiary may authorise his employer to deduct his contribution from his monthly wages and to remit the same, within fifteen days from such deduction, to the Board.

Section 30

(1) Every employer shall maintain such registers and records given such particulars of building workers employed by him, the work performed by them, a day of rest in every period of seven days which shall be allowed to them, the wages paid to them, the receipts given by them and such other particulars in such form as may be prescribed.

(2) Every employer shall keep exhibited, in such manner as may be prescribed, in the place where such workers may be employed, notice in the prescribed form containing the prescribed particulars.

(3) The appropriate Government may, by rules, provide for the issue of wage books or wage slips to building workers employed in an establishment and prescribed the manner in which entries shall be made by authenticated in such wage books or wage slips by the employer or his agent.

Building and Other Construction Workers' Welfare Cess Act, 1996

3. Levy and collection of Cess.- (1) There Shall be levied and collected a cess for the purposes of the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996, at such rate not exceeding two percent- but not less than one per cent. of the cost of construction incurred by an employer, as the Central Government may, by notification in the Official Gazette, from time to time specify.

4. Furnishing of returns.- (1) Every employer shall furnish such return to such officer or authority, in such manner and at such time as may be prescribed.

Building and Other Construction workers' Welfare Cess Rules, 1998

3. Levy of cess.- For the purpose of levy of cess under sub-section (1) of section 3 of the Act, cost of construction shall include all expenditure incurred by an employer in connection with the building or other construction work but shall not include-

-cost of land;

-any compensation paid or payable to a worker or his kin under the Workmen's Compensation Act. 1923.

1.	Vide G.S.R. 49(E), dated 26th March, 1998, published in the Gazette of India, Extra., Pt. II, Sec. 3 (i), dated 26th March, 1998
2.	Came into force on 26th March, 1998

4. Time and manner of collection.- (1) The cess levied under sub-section (1) of section 3 of the Act shall be paid by an employer, 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.

(2) Notwithstanding the provisions of sub-rule (1), where 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.

(3) Notwithstanding the provisions of sub-rule (1) and sub-rule (2), where the levy of cess pertains to building and other construction work of a Government or of a Public Sector Undertaking, such Government or the Public Sector Undertaking shall deduct or cause to be deducted the cess payable at the notified rates from the bills paid for such works.

(4) Notwithstanding the provisions of sub-rule (1) and sub-rule (2), where the approval of a construction work by a local authority is required, every application for such approval shall be accompanied by a crossed demand draft in favour of the Board and payable at the station at which the Board is located for an amount of cess payable at the notified rates on the estimated cost of construction:

Provided that if the duration of the project is likely to exceed one year, the demand draft may be for the amount of cess payable on cost of construction estimated to be incurred during one year from the date of commencement and further payments of cess due shall be made as per the provisions of sub-rule (2).

6. Information to be furnished by the employer.-(1) Every employer, within thirty days of commencement of his work of payment of cess, as the case may be. Furnish to the Assessing Officer, information in Form I.

(2) Any change or modification in the information furnished under sub-rule (1) shall be communicated to the Assessing Officer immediately but not later than thirty days from the date of affecting the modification or change.

7. Assessment.-(1) The Assessing Officer, on receipt of information in Form I from an employer shall make a secrutiny of such information furnished and, if he is satisfied about the correctness of the particulars so furnished, he shall make an order of assessment within a period not exceeding six months from the date of receipt of such information in Form I, indicating the amount of cess payable by the employer and endorse a copy thereof to the employer, to the Board and to the cess collector and despatch such order within five days of the date on which such order is made.

(2) The order shall inter-alia specify the amount of cess due, cess already paid by the employer or deducted at source and the balance amount payable and the date, consistent with the provision of rule 4, by which the cess shall be paid to the cess collector.

(3) If on scrutiny of information furnished, the Assessing Officer is of the opinion that employer has under-calculated or miscalculated the cost of construction or has calculated less amount of cess payable, he shall issue notice to the employer for assessment of the cess.

(4) On receipt of such notice the employer shall furnish to the Assessing Officer a reply together with copies of documentary or other evidence in support of his claim, within fifteen days of the receipt of the notice:

Provided that the Assessing Officer may, in the course of assessment, afford an opportunity to the assessee to be heard in person, if he so requests to substantiate his claim.

(5) If the employer fails to furnish the reply within the period specified under sub-rule (4), or where an employer fails to furnish information in Form I, the Assessing Officer shall proceed to make the assessment on the basis of available records, and other information incidental thereto.

(6) The Assessing Officer may, at anytime while the work is in progress, authorise such officer to make such enquiry at the work site or from documentary evidence or in any other manner as he may think fit for the purpose of estimating the cost of construction as accurately as possible.

FORM I

(See rule 7)

Name of Establishment

Registration No. under Building and other Construction Workers’ (Regulation of Employment and Condition of Service) Act, 1996. Registering Authority

Address

Name of Work

Estimated period work : Month Year

No. of Workers employed

Date of commencement of work
Date	Month	Year

Estimated cost of construction Details of payment of cess

Stages

Cost

Amount Challan No. and Date

Advance-A

Deduction at Source-D

Final-F

1st Year

2nd Year

3rd Year

4th Year

Total:

Signature of Employer

Name of Employer

Date

TO BE FILLED BY ASSESSING OFFICER

Date of completion

Final cost

Date of assessment

10.

Amount assessed

11.

Date of Appeal, if any

Date of order in Appeal

13..

Amount as per Order in Appeal

14.

Date of transfer of cess to the Board

15.

Amount transferred Challan No. and date

Signature

Designation

FORM II

[See rule 9 (1)]

Notice of Stoppage or Reduction of Work

Name of Establishment

Registration No. under Building and Other Construction Workers’ (Regulation of Employment and Condition of Service) Act, 1996

Address:

II.

Date of commencement of work
Date	Month	Year
Estimated cost of work (original)

Reason

Yes/No.

III.

Modification to the original estimates

Revised date of completion/date of stoppage

Actual cost estimates

Actual cost incurred

Whether work is being handed over in any other person/agency for completion.

If yes. Name/Address of such

Person/agency.

Signature of employer

Name of employer

Date

TO BE USED BY ASSESSING OFFICER

Date of revision of assessment

Amount of cess after revision

Cess already received

Cess to be recovered

Cess to be refunded, if any

Reference to Board for refund;

Date/number

Signature

Designation

Information required

1. Name and location of the establishment where Building : Mention the place where

or other construction work is to be carried on the job is carried out

2. Postal address of the establishment : Mention your office address

3. Full name and permanent address of the : mention the same as above

Establishment, if any

4. Full and address of the Manager or person : write branch manger’s name

Responsible for the supervision and control and branch address

Of the establishment

5. Nature of building or other construction work : Construction of Building

Carried /is to be carried on in the establishment

6. Maximum number of building workers : mention the max. no. of workers

Employed on any day (the strength should not go more

Than the specified no. at any time)

7. Estimated date of commencement of building or the : Mention the likely date beginning

Other construction work

8. Estimated date of completion of the building or other : Mention the like date of completion

Construction work

Fee

No. of workers proposed to be employed Fees (Rs.)
(a) Is up to 100 Rs. 2000/-
(b) Exceeds 100 but does not exceed 500 Rs. 5000/-
(c) Exceed 500 Rs. 10,000/-

CA. Brijesh Baranwal

Chartered Accountant (in whole time practice)

Mobile-9312412020

BK Baranwal & Co., Chartered Accountants, Unit No. 211, Second Floor, Vardhman Sudarshan Plaza, Plot No. 4, Sector-5, Dwarka, New Delhi-110075. Mobile-+91 9312412020, Email: cabrijesh @ yahoo.co.in Web : www.bkbaranwal.com