Section 37: Levy and Collection of Cess

Overview

Section 37 of the Code on Social Security, 2020 deals with the levy and collection of a Cess on construction projects. This Cess is specifically earmarked for funding welfare schemes designed to benefit building and other construction workers (BOCW). These schemes cover a wide range of benefits including health care, safety measures, skill development, pension, insurance, and other welfare provisions aimed at improving the socio-economic conditions of this vulnerable workforce.

Who is Covered?

• The Cess applies to all building and other construction works, regardless of the size or nature of the project.
• It covers all employers undertaking such construction work, including contractors and principal employers.
• There are no specific eligibility conditions related to the length of service or wage limits for the *workers* who benefit from the schemes funded by the Cess; the Cess applies to the *construction project* itself.

Benefits and Contributions

• Benefit to Workers: Construction workers benefit from various welfare schemes funded by the Cess, including medical benefits, financial assistance for children's education, housing assistance, and pension schemes.
• Contribution Responsibility: The responsibility for levying, collecting, and remitting the Cess lies primarily with the employer (contractor or principal employer). The Cess is levied on the cost of construction.
• Government Role: The Government is responsible for administering the Cess fund and implementing the welfare schemes for construction workers.

Procedure and Compliance

Here's a simplified breakdown of the process:

1. Cess Levy: The Cess is levied at a rate determined by the appropriate Government.
2. Cess Assessment: The Cess is calculated based on the total cost of construction, as defined under the Code.
3. Payment: Employers are required to deposit the collected Cess with the designated authority within a specified timeframe (as prescribed by the rules).
4. Registration: While not explicitly stated in Section 37, employers may need to register with the relevant authorities for Cess compliance, depending on the specific rules framed under the Code.
5. Record Keeping: Employers must maintain accurate records of Cess collected and deposited.

Practical Examples

• Example 1: Worker Eligibility A construction worker, Ramesh, suffers a work-related injury. Because the employer regularly deposited the construction cess, Ramesh is eligible to receive medical benefits and compensation under the schemes funded by the Cess.
• Example 2: Employer Non-Compliance A contractor, Suresh, fails to deposit the collected Cess for a building project. The relevant authority can impose penalties, including interest and prosecution, as per the provisions of the Code and associated rules.

Disclaimer

This article is for basic understanding of the Code on Social Security, 2020, specifically Section 37 relating to construction cess, and should not be treated as legal advice. Consult with a legal professional for specific guidance on your situation.