Bill with Labor cess

[Asked by Guest]

Dear Sir,

We awarded some civil contract to some contractors/companies. In work order we mentioned we will reimbursed a labor cess amount after submission of proof.

Now, contractors raised an invoice with labor cess. This type of invoice, How can pass for further payment.

Example:- Bill amount ₹ 100/- and labor cess is 1% on basic value, Total value is 101. My superior has advised for passing this type of invoice.

Our HR head told pass the ₹ 100/- & 1% amount to be deposit at BOCW.

Please suggest.

Sanjay Vasava

AI Summary

Labour cess recovery and accounting: treat invoiced cess as statutory due, book full amount and ensure remittance.
Labour cess included in a contractor's invoice is a statutory due and should be recorded as part of the payable amount. Employers should book the full invoiced sum and either obtain proof of the contractor's remittance (chalans, DD receipts) before reimbursing or pay the cess directly and retain receipts; the contractor remains primarily liable for remittance and faces departmental consequences if he fails to pay.