Building and Other Construction workers' Welfare

Cess Rules, 1998

Rules

Building and Other Construction workers' Welfare Cess Rules, 1998

1.

Short title and commencement

2.

Definitions

3.

Levy of cess

4.

Time and manner of collection

5.

Transfer of the proceeds of the cess to the Board

6.

Information to be furnished by the employer

7.

Assessment

8.

Return of overpaid cess

9.

Exemption

10.

Powers of Assessing Officer and other officers

11.

Date of payment

12.

Penalty for non-payment

13.

Revovery of overdue amount

14.

Appeal

15.

Filing of Complaints

FORM I
FORM II

1. Short title and commencement.- (1) These rules may be called the Building and Other
Construction Workers' Welfare Cess Rules, 1998.
(2) They shall come into force on the date2 of their publication in the Official Gazette.
2. Definitions.-In these rules, unless the context otherwise requires,(a) Act' means the Building and Other Construction Workers' Welfare Cess Act, 1996 (Act 28 of
1996),
(b) Main Act' means the Building and Other Construction Workers (Regulation of Employment
and Conditions of Service) Act. 1996 (Act 27 of 1996).
(c) 'Form' means the form annexed to these rules.
(d) All other words and expressions used in these rules but not defined and defined in the Act or
in the main Act shall have tile meanings respectively assigned to them in those Acts.
(e) 'Specified' means specified by a State Government by an order published in tile Official
Gazette.
(f) 'Cess Collector' means an officer appointed by the State Government for collection of cess
under the Act.
(g) Assessing Officer' means a gazetted officer of a State Government or an officer of a local
authority holding an equivalent post to a gazetted officer of the State Government appointed by
such State Government for assessment of Cess under the Act.
(h) Appellate Authority' means an officer, senior in rank to the Assessing Officer, appointed by
the State Government for the purposes of section 11 of the Act.
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.
1.

Vide G.S.R. 49(E), dated 26th March, 1998, published in the Gazette of India, Extra., Pt. II,
Sec. 3 (i), dated 26th March, 1998

2. Came into force on 26th March, 1998

4. Time and manner of collection.- (1) The cess levied under sub-section (1) of section 3 of
the Act shall be paid by an employer, within thirty days of completion of the construction project
or within thirty days of the date on which assessment of cess payable is finalised, whichever is
earlier, to the cess collector.

(2) Notwithstanding the provisions of sub-rule (1), where the duration of the project or
construction work exceeds one year, cess shall be paid within thirty days of completion of one
year from the date of commencement of work and every year thereafter at the notified rates on
the cost of construction incurred during the relevant period.
(3) Notwithstanding the provisions of sub-rule (1) and sub-rule (2), where the levy of cess
pertains to building and other construction work of a Government or of a Public Sector
Undertaking, such Government or the Public Sector Undertaking shall deduct or cause to be
deducted the cess payable at the notified rates from the bills paid for such works.
(4) Notwithstanding the provisions of sub-rule (1) and sub-rule (2), where the approval of a
construction work by a local authority is required, every application for such approval shall be
accompanied by a crossed demand draft in favour of the Board and payable at the station at
which the Board is located for an amount of cess payable at the notified rates on the estimated
cost of construction:
Provided that if the duration of the project is likely to exceed one year, the demand draft may
be for the amount of cess payable on cost of construction estimated to be incurred during one
year from the date of commencement and further payments of cess due shall be made as per
the provisions of sub-rule (2).
(5) An employer may pay in advance an amount of cess calculated on the basis of the
estimated cost of construction along with the notice of commencement of work under section 46
of the Main Act by a crossed demand draft in favour of the Board and payable at the station at
which the Board is located:
Provided that if the duration of the project is likely to exceed one year, the demand draft may
be for the amount of cess payable on cost of construction estimated to be incurred during one
year from the date of such commencement and further payment of cess due shall be made as
per the provisions of sub-rules (2).
(6) Advance cess paid under sub-rules (3), (4) and (5), adjusted be adjusted in the final
assessment made by the Assessing Officer.
5. Transfer of the proceeds of the cess to the Board.- (1) The proceeds of the cess collected
under rule 4 shall be transferred by such Government office, Public Sector Undertakings, local
authority, or cess collector; to the Board alongwith the form of challan prescribed (and in the
head of account of the Board) under the accounting procedures of the State, by whatever name
they are known.
(2) Such government office of Public Sector Undertaking may deduct from the cess collected, or
claim from the Board, as the case may be, actual collection expenses not exceeding one
percent. of the total amount collected.
(3) The amount collected shall be transferred to the Board within thirty days of its collection.

6. Information to be furnished by the employer.-(1) Every employer, within thirty days of

commencement of his work of payment of cess, as the case may be. Furnish to the Assessing
Officer, information in Form I.
(2) Any change or modification in the information furnished under sub-rule (1) shall be
communicated to the Assessing Officer immediately but not later than thirty days from the date
of affecting the modification or change.
7. Assessment.-(1) The Assessing Officer, on receipt of
information in Form I from an employer shall make a
secrutiny of such information furnished and, if he is
satisfied about the correctness of the particulars so
furnished, he shall make an order of assessment within
a period not exceeding six months from the date of
receipt of such information in Form I, indicating the
amount of cess payable by the employer and endorse a
copy thereof to the employer, to the Board and to the
cess collector and despatch such order within five days
of the date on which such order is made.
(2) The order shall inter-alia specify the amount of cess
due, cess already paid by the employer or deducted at
source and the balance amount payable and the date,
consistent with the provision of rule 4, by which the cess
shall be paid to the cess collector.
(3) If on scrutiny of information furnished, the Assessing
Officer is of the opinion that employer has undercalculated or miscalculated the cost of construction or
has calculated less amount of cess payable, he shall
issue notice to the employer for assessment of the cess.
(4) On receipt of such notice the employer shall furnish
to the Assessing Officer a reply together with copies of
documentary or other evidence in support of his claim,
within fifteen days of the receipt of the notice:
Provided that the Assessing Officer may, in the course
of assessment, afford an opportunity to the assessee to
be heard in person, if he so requests to substantiate his
claim.
(5) If the employer fails to furnish the reply within the
period specified under sub-rule (4), or where an
employer fails to furnish information in Form I, the
Assessing Officer shall proceed to make the assessment
on the basis of available records, and other information
incidental thereto.
(6) The Assessing Officer may, at anytime while the work
is in progress, authorise such officer to make such
enquiry at the work site or from documentary evidence

or in any other manner as he may think fit for the

purpose of estimating the cost of construction as
accurately as possible.
8. Return of overpaid cess.- (1) Where the Assessing
Officer has passed an order of assessment and the employer
decides to withdraw from or foreclose the works or modifies
the plan of construction thereby reducing the cost of
construction undertaken or has been forced by other
circumstances to call off the completion of the work
undertaken he may seek revision of the assessment order by
making an information in Form II to the Assessing Officer
giving details of such reduction or stoppage of work.
(2) Revision of order of assessment shall be made by the
Assessing Officer, in the same manner as the original order,
within thirty days of receipt of such information in Form II.
(3) Following the revision of assessment as per sub-rule (2),
the Assessing Officer shall, wherever necessary, endorse a
copy of the revised assessment to the Board or cess
collector, as the case may be, for making the refund of
excess cess as ordered in the revised assessment.
(4) The Board shall, within thirty days of receipt of the
endorsement from the Assessing Officer under sub-rule (3),
refund the amount specified in the order to the employer
through a demand draft payable at the station where the
establishment is located.
(5) Where the Appellate Authority has modified the order of
assessment reducing the amount of cess, refund shall be
made within such time as may be specified in that order.
9. Exemption.- (1) Any employer or class of employers in a State
seeking exemption under section 6 of the Act may make an
application to the Director General of Labour Welfare, Ministry of
Labour, Government of India, stating the details of works
Undertaken, name of The Act or corresponding law in force in that
State under which he is liable to pay cess for the welfare of the
construction workers and amount of cess actually paid along With
the date of such payment and proof thereof. A copy of such
application shall be endorsed to each of the Assessing Officer and
the board concerned.
(2) On receipt of such application the Central Government may, if
it feels necessary, seek a report from the State Government
concerned.
(3) On examining the grounds, facts and merits of such

application the Central Government may, by notification in the

Official Gazette, issue an order exempting the employer or class
of employers, as the case may be, from payment of cess payable
under the Act where such cess is already levied and payable
under such corresponding law.
(4) Assessment proceedings shall be stopped by the Assessing
Officer for a period of thirty days commencing from the date of the
receipt of a copy of the application under sub-rule (1) to him, or till
the order of the Central Government under sub-rule (3) is
conveyed to an employer or class of employers who made the
application under sub-rule (1), whichever is earlier.3
10. Powers of Assessing Officer and other officers.- (1) An
Assessing Officer, or an officer authorised under sub-rule (8) of Rule 7,
if empowered by the State Government under section 7 of the Act,
may,(a) enter any establishment where building and other construction
work is going on;
(b) make an inventory of materials, machinery or other articles lying at
the work place;
(c) enquire about the number of workers engaged in various activities;
(d) require the production of any prescribed register or any other
documents relevant to the assessment of cost of construction or
number of workers employed;
(e) seize or take copies of any such records;
(f) make general assessment of the stage of the construction work
having been completed;
(g) direct the employer or any other person incharge of the place that
no material or machinery shall be removed or disturbed for so long as
is necessary for the purpose of any examination;
(h) take measurement, notes or photographs;
(i) exercise such other powers considered absolutely necessary for
reasonable assessment of cost of construction.
11. Date of payment.- Of cess shall be the date on which the amount is
deposited with the cess collector under sub-rule (1) of rule 4, or the date of
deduction at source under sub-rule (3) of rule 4, or the date on which the
draft has been deposited with the local authority under sub-rule (4) of rule
4, as the case may be.

12. Penalty for non-payment.- (1) An Assessing Officer, if it appears to him

that an employer has not paid the cess within the date as specified in the
assessment order or has paid less cess, including the cess deducted at source
or paid in advance, shall issue a notice to such employer that it shall be deemed
to be in arrears and such Assessing Officer may, after such inquiry as it deems
fit, impose on such employer a penalty not exceeding such amount of cess:
Provided that before imposing any such penalty, such employer shall be given
a reasonable opportunity of being heard and if after such hearing the Assessing
officer is satisfied that the default was for any good and sufficient reason, no
penalty shall be imposed on such employer.
13. Revovery of overdue amount.-For the purpose of recovery of sums due on
account of unpaid cess, interest for overdue payment or, penalty under these rules,
the assessing officer shall prepare a certificate signed by him, specifying the amount
due and send it to the collector of the district concerned who shall proceed to
recover from the said employer the amount specified thereunder as if it were an
arrear of land revenue.
14. Appeal.- (1) An employer aggrieved by an order of the assessment made under rule
7 or by an order imposing penalty made under rule 12 may appeal against such order,
within three months of the receipt of such order, to the Appellate Authority.
(2) The appeal shall be accompanied with(a) the order appealed against;
(b) a certificate from the cess collector to the effect that the amount of cess or penalty or
both, as the case may be, relating to such appeal has been-deposited;
(c) a fee equivalent to one per cent. of the amount in dispute or penalty or both, as the
case may be, under such appeal.
(d) a statement of points in dispute;
(e) documentary evidence relied upon.
(3) On receipt of the appeal the Appellate Authority may call from the Assessing Officer a
statement on the basis of his assessment order appealed against, as such Appellate
Authority may consider necessary for the disposal of such appeal;
(4) The Appellate Authority shall give the appellant an opportunity of being heard in the
matter and dispose of the appeal as expeditiously as possible.
(5) On being satisfied on the quantum of cess the Appellate Authority shall confirm the
order of the Assessing Officer or if in his opinion the assessment was wrong or on the
higher side shall modify the order of assessment or if in his opinion the assessment is on
the lower side or if the basis of assessment is wrong, it shall remand back the
assessment order to the Assessing Officer alongwith his observations to rectify the

wrong.
(6) All order remanded back under sub-rule (5) shall be disposed of by the Assessing
Officer within one month in view of the observation made by the Appellate Authority:
Provided that if the amount of cess is proposed to be enanced the assessee shall be
given an opportunity of being heard.
(7) No appeal shall lie against the order of the Appellate Authority under this rule.
(8) If the Appellate Authority is of the opinion that the quantum of penalty imposed is on
the higher side or not correctly made it shall suitably modify or set aside the order of the
Assessing Officer, as the case may be.
(9) The appeal under this rule shall be disposed of by making a speaking order and a
copy of such order shall be sent to each of the appellant, the Assessing Officer and the
Board within five days of the date on which such order is made.
(10) An order in appeal reducing the amount of cess shall also ask the Board to refund
the excess cess.
(11) An order in appeal reducing, enhancing or confirming the orders of penalty, as the
case may be, shall also specify the date by which the amount of penalty should be
paid/refunded.
15. Filing of Complaints.- (1) The Assessing Officer, or any inspector under the main Act, or
Trade Union, having come to know of violation of an obligation to furnish return, furnishing of
false information, intentionally or willfully evading or attempting to evade the payment of cess
may make complaint to the Board. The Board on receiving such complaint shall examine the
complaint and if it so decide may refer such complaint to the Central Government for taking
legal action against the offender.
(2) The Central Government on receiving such reference may make such inquiry as may be
considered necessary and authorise an inspector of appropriate jurisdiction to file a complaint
in the Court of Law.

FORM I
(See rule 7

1.

Name of Establishment

Registration No. under Building and other Construction

Workers (Regulation of Employment and Condition of
Service) Act, 1996. Registering Authority

2. Address
3. Name of Work
4. No. of Workers employed
5.

Date of commencement of work

Date
Month
Year

Estimated period work : Month

Year

6. Estimated cost of construction Details of payment of cess

Advance-A
Stages

Cost

Amount Challan No.

Deduction at Source-D
and Date
Final-F

1st Year
2nd Year
3rd Year
4th Year
Total:
Signature of Employer
Name of Employer
Date
TO BE FILLED BY ASSESSING OFFICER
7. Date of completion
8. Final cost
9. Date of assessment
10. Amount assessed
11. Date of Appeal, if any
12 Date of order in Appeal
13.. Amount as per Order in Appeal
14. Date of transfer of cess to the Board
15.

Amount transferred Challan No. and

date
Signature
Designation

FORM II
[See rule 9 (1)]
Notice of Stoppage or Reduction of Work

I.

Name of Establishment

Registration No. under Building and Other

Construction Workers (Regulation of
Employment and Condition of Service) Act,
1996

Address:
II.

Date of commencement of work

Date
Month
Year
Estimated cost of work (original)
Modification to the original estimates
Revised date of completion/date of stoppage
Actual cost estimates

III.

Reason
Yes/No.

Actual cost incurred

Whether work is being handed over in any other
person/agency for completion.
If yes. Name/Address of such
Person/agency.

Signature of employer
Name of employer
Date
TO BE USED BY ASSESSING OFFICER
Date of revision of assessment
Amount of cess after revision
Cess already received

Cess to be recovered

Cess to be refunded, if any

Reference to Board for refund;

Date/number
Signature
Designation