The Supreme Court of India, in the case of Uttar Pradesh Power Transmission case, decided on 12th May 2021 has held that no cess would be payable under the BOCW Act for a supply contract. The Supreme Court made the following observations:
“Cess under the Cess Act read with BOCW Act is leviable in respect of building and other construction works. The condition precedent for imposition of cess under the Cess Act is the construction, repair,
demolition or maintenance of and/or in relation to a building or any other work of construction, transmission towers, in relation inter alia to generation, transmission and distribution of power, electric lines, pipelines etc. Mere installation and/or erection of pipelines, equipments for generation or transmission or distribution of power, electric wires,
transmission towers etc. which do not involve construction work are not amenable to Cess under the Cess Act. No information was given or any return filed with the Assessing Officer under the Cess Act or the Inspector under the BOCW Act in respect of the First and Second Contracts, either by UPPTCL or by the Respondent No.1.
54. A contractor who enters into a pure Supply Contract is statutorily exempted from levy under the BOCW Act……”
Copy of the judgement