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Avinash Kumar Sharma (Sr. Manager HR)     10 April 2011


Dear Sir,

I am working in a factory which is running under Factories Act but making massive extension in its existing structure. Labour authorities are pressurising the management to deposit the 1% cess on constuction cost of the structure under Building and Other Constuction Workers Act 1996 but the management is apprehensive because in the Act the establishments which are covered under Factories Act are exempted. Now the question is wheather the massive expansion is covered under the BOCW Act 1996 or nor?




 5 Replies

Jacob K. Abraham (Sr. Manager)     11 April 2011

My opinion is that if the premises where expansion is undergoing is ialready covered in the factory layout/factory premises drawing approved by the Factory Inspector,  then such expansion is being done in the factory already covered by Factories Ac, 1948.  Therefore the provisions of BOCWA, 1996 will not be applicable to such premises as such no Building Cess is required to be paid.  However all the provisions of the Factories Act, 1948 will apply to such premises.

If the premises are not covered  in the factory layout drawing approved by Factory Inspector, the provisions of BOCWA, 1996 will apply.

1 Like

Kamal Prasoon Sinha (Service)     12 April 2011

The provisions of the special Act i.e. the Factory Act will override the provisions of the general Act i.e. the BOCWA, 1996.

There is a number of Supremem Court and High Courts rulings in this reagrd.

Labour authorities cannot enforce provisions of BOCWA, 1996 when  the Factory Act is already in force.


Kamal Prasoon Sinha

V. VASUDEVAN (LEGAL COUNSEL)     12 April 2011


Please review the intent of the B&OCW Act. This is a one time cess levied on the employers constructing the building. Hence the building may be for the purpose of factory. As yet the workers engaged for the construction will be construction worker's for whose welfare the fund being augment is intended. Hence in my view, the cess is applicable.


An Act is provide for the levy and collection of a cess on the cost of construction incurred by employers with a view to augmenting the resources of the Building & Other Construction Workers’ Welfare Boards constituted under the Building & Other Construction Workers (Regulation of Employment and Conditions of Service) Act,1996It extends to the whole of India and come in to force on the 3rd day of November, 1995.

Under the Act 1% cess shall be collected from every employer where the cost of construction is more than Rs. 10 lakhs. The proceeds of the cess so collected shall be paid by the local authority or the State Government collecting the cess to the Board after deducting the cost of collection of such cess not exceeding 1% 0f the amount collected.


1 Like

Jacob Pratap (service)     22 April 2011

The views of Mr. Vasudevan are correct. You cam mail me at jacobpratap@gmail.com to me to have a copy of the  judgment of the Punjab & Haryana High Court on this point.


Jacob Pratap

rajjukumar (dy director)     23 April 2014

It may be my personal opinion but as far law is concern when disput arises than  we must go through O and R of the law . before commenting on applicability we must know y BOCW 1996 came into exitence.  it was due to overcome of shortcomings which were observed during applicability of factories act as during most of new construction of factories  workers were not get benefitted as the factories was not under production (manufacturing ) stage so liablity was not part of occupier hence  workers were deprived of their legal rights. so during construction of factories UNTIL AND UNLESS THE manufacturing process has been not started BOCW act will be applicable. but as far expansion is concern when it persist within the factories prermises whose approval has been already taken than factories fact will be applicable. thanx


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