Leving of building and other construction worker,s welfare fund act, 1996

T. K. Jacob (Querist) 16 October 2014 This query is : Resolved
Sir,
I am T.K. Jacob from Kannur District of Kerala. I request you to kindly advise me in the following aspect:

I have constructed a residential house in my native place during 2001-2002. In the Panchayat ( Kelakom Panchayat, Kannur District), no permission was required for the construction of the house at that time. After completion of the construction, a house number was allotted to me by the Panchayat. On 14-10-2014 (after 12 years), I received a registered letter from the Assessing Officer, Building and Other Construction Workers Welfare Board, Kannur asking me to pay Rs.20152/- towards the Cess before 29-10-2014. They assessed the cost of construction of my house as more than Rs.20 lakh. In the letter they mentioned that I have already been intimated about the cess by one of their earlier letters. But I have not received any such letter. I have not spend such a huge amount on my house and I have taken prior permission from my Office for construction of the house at a cost of Rs.9,69,000/- as required by a public servant.
Kindly provide your expert advice on:
1. Whether I am liable to pay the cess for my house?
2. My actual cost of construction falls below 9 lakhs, as most of the construction materials including wood were collected locally/from my own agricultural land?
3. How to prove that the cost of construction is less than 9 lakh. I am having a copy of the official letter issued to me by my office (Indian Council of Agricultural Research) permitting to contruct the house at a cost of Rs.9,69,000/-

4. What are the remedial measures available to me to solve the issue?

Expecting an early reply,
With thanks,
T.K. Jacob
Thuruthumkara House,
Kanichar Post,
Kannur District,
Kerala-670674.

Follow Query

Report Abuse

Anirudh (Expert) 16 October 2014
Dear Jacob,

The Act provides for levy and collection of cess on the cost of construction incurred for augmenting the resources of the State Welfare Boards constituted under BOCW (RECS) Act, 1996.

Levy and collection of cess not exceeding 2% but not less than 1% of the cost of construction incurred by en employer (at present the rate of cess is 1%.)

For failure to pay the amount of cess within the specified date, prescribed authority can impose penalty not exceeding the amount of cess.

Penalty with imprisonment upto 6 months or with fine upto Rs. 1000/- or with both is prescribed for furnishing false returns.

When you have spent the money, naturally you will be having details of the same - like withdrawal from the bank, housing loan if any, the value of the material used (purchase vouchers) etc.

Devajyoti Barman (Expert) 16 October 2014
Please consult your local lawyers.
Ces and levies are mostly governed by local laws and if any state law in this regard makes it mandatory to pay such amount, you have tho do so.
Meet a local lawyer.

ajay sethi (Expert) 16 October 2014
you have to dispute the cots mentioned of Rs 20 lakhs . mention that total cost incurred was only Rs 9,69,000 . enclose copy of bills for purchase of Raw materials etc , payment made to contractors etc. state that amount of claim of Rs 20,000 is erroneous .