Power Point Presentation on Labour Cess - MACP

1 1 Power Point Presentation on Labour cess CONTENT OF THE Presentation PREPARED BY INDAPURKAR & MUNDADA CHARTERED ACCOUNTANTS 2 01 . Introduction to the Act 02. Purpose of the Act 03. Applicability of the Act 04. Why DDRCS unit is liable for Labour cess ? 05. Consequences of Delay / Failure in payment of cess 06. Penalties 01. INTRODUCTION TO THE ACT PREPARED BY INDAPURKAR & MUNDADA CHARTERED ACCOUNTANTS 3 A . Why the act was introduced ? Rapid development of construction owing to the needs of better public infrastructure developments. B. What is the Act ? The name of the applicable act is Building & Other Construction Workers [ Regulation of Employment and Conditions of Service ] Act , 1996 , BOCW Act specifies the BUILDING & OTHER CONSTRUCTION WORKERS WELFARE cess ACT , 1996 generally known as cess ACT , 1996.

2 02. PURPOSE OF THE ACT PREPARED BY INDAPURKAR & MUNDADA CHARTERED ACCOUNTANTS 4 A. The purpose is To collect the cess on Cost of construction incurred , for use of the Welfare of Construction workers who are registered with the respective act. 03. APPLICABILITY PREPARED BY INDAPURKAR & MUNDADA CHARTERED ACCOUNTANTS 5 A. The act is applicable to every Establishment employing ten or more than ten Building Workers B. In any Building or Construction work C. Anytime during the preceding Twelve Months D. cess act prescribes payment of cess @ 03. APPLICABILITY PREPARED BY INDAPURKAR & MUNDADA CHARTERED ACCOUNTANTS 6 Who is the Contractor as per the act ? 01. Contractor is the person who undertakes to produce a given result for any establishment 02.

3 Other than supply of goods or articles of manufacture 03. By employment of building workers or who supplies building workers for any work of establishment 04. Includes a Sub Contractor 04. Why DDRCS are liable for Labour cess ? PREPARED BY INDAPURKAR & MUNDADA CHARTERED ACCOUNTANTS 7 Section 03 of cess ACT does not specifically state as to whether cess is required to be paid by owner or the contractor for the particular establishment. However, in the case of Delhi Metro Rail Corporation , it has been held by High Court that there is nothing wrong in deduction of amount of cess from bills of contractors. 04. Why DDRCS are liable for Labour cess ? PREPARED BY INDAPURKAR & MUNDADA CHARTERED ACCOUNTANTS 8 There can be deduction of cess at source without prior assessment so long as it remains adjustable against final liability that may be determined at the end of the assessment.

4 And this is the reason the DDRCS units should deduct the amount of Labour cess @ 01 % from the bills raised by the contractor. 05. Consequences for Delay in Payment PREPARED BY INDAPURKAR & MUNDADA CHARTERED ACCOUNTANTS 9 A. If any employer fails to pay any amount of cess payable under Section 3 within the time specified in the order assessment, such employer shall to pay interest on the amount to be paid at the rate of two per cent every month or part of a month comprised in the period from the date on which such payment is due till such amount is actually paid. 06. PENALTIES PREPARED BY INDAPURKAR & MUNDADA CHARTERED ACCOUNTANTS 10 A. Whoever contravenes the provisions of any rules under BOCW Act shall be punishable with : 1.

5 Imprisonment for a term which may extend to three months, 2. or with fine which may extend to two thousand rupees, or with both, 06. PENALTIES PREPARED BY INDAPURKAR & MUNDADA CHARTERED ACCOUNTANTS 11 B. And in the case of a continuing contravention, with an 1. additional fine which may extend to one hundred rupees for everyday during which such contravention continues after conviction for the first such contravention. SUMMARY PREPARED BY INDAPURKAR & MUNDADA CHARTERED ACCOUNTANTS 12 We have overviewed the exhaustive summary of Labour cess in this session. Thank you for the kind attention.