(Querist) 30 April 2011
This query is : Resolved
We are into power sector and doing various jobs on EPC basis for various state governments. Now in most of the states BOCW Act is implemented and govt is asking to deposit 1% cess on the cost of construction under the act.
Is the cess payable only on civil contract value or supply contract value also, as we are executing both the contracts with the govt. What does exactly 'cost of construction' means. Is it includes cost of Erection work also.
Raj Kumar Makkad
(Expert) 30 April 2011
Cess is payable on both civil contract and supply contract.
Cost of construction excludes only administrative charges incurred on completionn of contract so cost of erection is also cost fo construction.
(Expert) 01 May 2011
Cost of construction is defined in rule 3 of the BOCW welfare Cess Rules, 1998 which reads as under:- 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.