{"id":11223,"date":"2022-07-05T06:59:23","date_gmt":"2022-07-05T06:59:23","guid":{"rendered":"https:\/\/swaritadvisors.com\/blog\/?p=11223"},"modified":"2022-07-06T06:51:03","modified_gmt":"2022-07-06T06:51:03","slug":"what-is-the-concept-and-calculation-of-bocw-cess","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/blog\/what-is-the-concept-and-calculation-of-bocw-cess\/","title":{"rendered":"What is the Concept and Calculation of BOCW Cess?"},"content":{"rendered":"\n<p class=\"has-drop-cap\">The Government of India has made it mandatory for every State government to constitute their Building and Other Construction Workers Welfare Boards. The BOCW Cess under the BOCW Act mentions a taxable amount paid by the registered proprietor against the project&#8217;s cost. The Government has ratified various provisions around BOCW Cess under the BOCW Cess Act, 1996 and Rules, 1998. Cess is payable at 1% on the 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. This article will discuss the concept and calculation of BOCW cess in detail. <\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3ac6d76f1bc\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3ac6d76f1bc\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/blog\/what-is-the-concept-and-calculation-of-bocw-cess\/#The_Slab_Rate_for_BOCW_Cess_by_the_BOCW_Act\" title=\"The Slab Rate for BOCW Cess by the BOCW\nAct\">The Slab Rate for BOCW Cess by the BOCW\nAct<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/blog\/what-is-the-concept-and-calculation-of-bocw-cess\/#When_Should_Employer_Payout_The_BOCW_Cess\" title=\"When\nShould Employer Payout The BOCW Cess?\">When\nShould Employer Payout The BOCW Cess?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/blog\/what-is-the-concept-and-calculation-of-bocw-cess\/#details_to_be_provided_by_the_employer_in_the_Form-1\" title=\"details\nto be provided by the employer in the Form-1\">details\nto be provided by the employer in the Form-1<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/swaritadvisors.com\/blog\/what-is-the-concept-and-calculation-of-bocw-cess\/#Provisions_around_the_Concept_and_calculation_of_BOCW_Cess\" title=\"Provisions around the Concept and\ncalculation of BOCW Cess\">Provisions around the Concept and\ncalculation of BOCW Cess<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/swaritadvisors.com\/blog\/what-is-the-concept-and-calculation-of-bocw-cess\/#Points_To_Summarise_Regarding_BOCW_Cess\" title=\"Points To\nSummarise Regarding BOCW Cess\">Points To\nSummarise Regarding BOCW Cess<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/swaritadvisors.com\/blog\/what-is-the-concept-and-calculation-of-bocw-cess\/#Penalties_for_Late_or_Non-Filing_of_BOCW_Cess\" title=\"Penalties\nfor Late or Non-Filing of BOCW Cess\">Penalties\nfor Late or Non-Filing of BOCW Cess<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/swaritadvisors.com\/blog\/what-is-the-concept-and-calculation-of-bocw-cess\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_Slab_Rate_for_BOCW_Cess_by_the_BOCW_Act\"><\/span>The Slab Rate for BOCW Cess by the BOCW\nAct<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A cess is levied and collected at 1% of the construction cost by the State Governments\/UT Administrations under the Building and Other <strong>Construction Workers&#8217; welfare cess, 1996<\/strong><sup><a class=\"text-primary\" href=\"https:\/\/clc.gov.in\/clc\/acts-rules\/building-and-other-construction-workers\"><strong>[1]<\/strong><\/a><\/sup><strong>. <\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"When_Should_Employer_Payout_The_BOCW_Cess\"><\/span>When\nShould Employer Payout The BOCW Cess?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>The employer shall pay cess within 30 days of\nthe finalisation of the project or within 30 days of the date on which\nassessment of cess is completed, whichever is earlier, to the cess collector.<\/li><li>Suppose the project&#8217;s duration surpasses the\none-year timeline. In that case, the employer shall pay the cess within 30 days\nof one year from the beginning of the project and every year after that at\napplicable rates on the project&#8217;s cost sustained until the completion of the\nproject.<\/li><li>Where the regional authority permission is\ncompulsory for the construction work, every application for such permission\nshall be attached with a demand draft (DD) in favour of the Board for the\namount at applicable rates.<\/li><li>The advance cess payment is practicable for\nprojects whose period is likely to surpass a one-year timeline. Standard\nenclosures need to be attached for advance cess payment, including;<\/li><li>Notice of the project&#8217;s commencement according\nto the Section 46<\/li><li>Demand draft enclosing the cess amount in\napproval of the respective Board.<\/li><li>Advance cess pay by the employer under Sub-rules\n3, 4, &amp; 5 shall be adjusted by the assessment order(AO) during the final\nadjustment.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"details_to_be_provided_by_the_employer_in_the_Form-1\"><\/span><em>details\nto be provided by the employer in the Form-1<\/em><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>The registration number issued by the BOCW&nbsp;Act<\/li><li>Name and address of the establishment<\/li><li>Number of workers employed<\/li><li>Date of commencement of the project<\/li><li>The estimated cost of the project<\/li><li>Details of payment of cess<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Provisions_around_the_Concept_and_calculation_of_BOCW_Cess\"><\/span>Provisions around the Concept and\ncalculation of BOCW Cess<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Every employer must file Form-1 under the Cess Rules with the assessment order within 30 days of the commencement of the project of payment of cess. Upon receiving the said Form, the AO will initiate the vetting procedure of the same;<\/p>\n\n\n\n<ul><li>Employer <\/li><li>Board <\/li><li>Cess collector<\/li><\/ul>\n\n\n\n<p><strong>The assessment order usually encloses the following details:<\/strong><\/p>\n\n\n\n<ul><li>Amount of cess due<\/li><li>Cess already withdrew at source or paid<\/li><li>Balance amount payable<\/li><li>The due date for paying the cess fees<\/li><\/ul>\n\n\n\n<p><strong><em>Note: the employer is liable to\nreply to the assessment order within the prescribed timeframe to avert any\nchances of re-estimation.<\/em><\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Points_To_Summarise_Regarding_BOCW_Cess\"><\/span>Points To\nSummarise Regarding BOCW Cess<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>The estimate of <strong><a href=\"https:\/\/swaritadvisors.com\/bocw-registration\" class=\"text-primary\">BOCW Cess<\/a><\/strong> should be based on the overall construction payment addressed by the registered employers.<\/li><li>The factors like labour&#8217;s wages and land cost are not considered for BOCW cess estimation.<\/li><li>BOCW Act has allocated the responsibility of cess estimation to the official known as Accessing officer. Such officials have the right to enter the finances of the registered employer to calculate the exact cess amount.<\/li><li>&nbsp;Can resolve any dispute relating to cess estimation or discharge at Appellate Authority constituted under the BOCW Act. To engage in the hearing process, the resentful employer must file an appeal and an authorised fee with the Appellate Authority.<\/li><li>In case of postponed payment, the interest amounting to two percent of the overall cess amount shall be imposed on the employer.<\/li><li>In case of intentional cess evasion, may subject the defaulter to a penalty of Rs. 1000 or imprisonment for the term of six months or both. The same is also true of the falsification of data for cess discharge.<\/li><li>The penalties for alleged fraud or cess evasion shall apply to everyone in cases where the defaulting party is a company.<\/li><li>The decision made by the Appellate Authority shall remain unchallenged in any Court of Law.<\/li><li>Central Government reserves the exclusive authority for amending cess-related provisions under the BOCW Act. The Central Government, via Gazette Notification, shall share every amendment made publically.<\/li><li>Under no circumstances such penalties would come to effect unless the defaulter gets a fair hearing before the Appellate authority.<\/li><li>It is at the discretion of the Central Government to amend the provisions around the BOCW cess.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Penalties_for_Late_or_Non-Filing_of_BOCW_Cess\"><\/span>Penalties\nfor Late or Non-Filing of BOCW Cess<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li><strong>Interest\npayable on delay in payment of cess<\/strong>.\u2014<\/li><\/ul>\n\n\n\n<p>Suppose an employer fails\nto pay any amount of cess payable under section 3 within the time specified in\nthe assessment order. In that case, such employer shall be liable to pay\ninterest on the amount to be paid at 2%. For each month or part of a month,\ncontain the period from the date on which such payment is due till such amount\nis paid.<\/p>\n\n\n\n<ul><li><strong>Penalty\nfor non-payment of cess within the described time.\u2014<\/strong><\/li><\/ul>\n\n\n\n<p>Any amount of cess\npayable by any employer under section 3 is not paid within the date specified\nin the order of assessment made under section 5 shall be deemed in arrears. The\nauthority stipulates on this behalf may, after making such inquiry as it deems\nfit, force on such employer a penalty not exceeding the amount of cess:\nProvided that, before imposing any such penalty, such employer shall be given a\nreasonable opportunity of being heard and if after such hearing the said\ndepartment is satisfied that the default was for any good and sufficient\nreason, shall impose no penalty under this section.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>BOCW Act enforces\nstringent penalties for avoidance or late filing of BOCW cess. The property\ncost and wages paid to the workers are not considered for estimating the cess\namount. The net project cost is the only basis of cess approximation.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Government of India has made it mandatory for every State government to constitute their Building and Other Construction Workers Welfare Boards. The BOCW Cess under the BOCW Act mentions a taxable amount paid by the registered proprietor against the project&#8217;s cost. The Government has ratified various provisions around BOCW Cess under the BOCW Cess [&hellip;]<\/p>\n","protected":false},"author":11,"featured_media":11257,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1008],"tags":[1033],"acf":[],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/11223"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/comments?post=11223"}],"version-history":[{"count":5,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/11223\/revisions"}],"predecessor-version":[{"id":11285,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/11223\/revisions\/11285"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media\/11257"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media?parent=11223"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/categories?post=11223"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/tags?post=11223"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}