The GHMC planned to collect labour cess form real estate builders at the time of issuing permission for the construction of projects.

Glance on Modified Labour Cess

Many real estate builders failing to pay labour cess, so civic body decided to collect labour cess at the time of approving project construction. The rules formulated in accordance with the Building and Other Construction Workers Welfare Cess Act, 1996, it mandates the corporation to collect the cess of 1% over the estimated cost of construction from the builders when they approach for approvals of building plans. 

Previously, the Labor Department, after obtaining the details from the municipal corporation, used to collect the labour cess from the builders. According to norms, one percent of the construction cost (for Rs 10 lakh and above) is the labour cess, and the contractor needs to pay for it depending on the project progress. The cess also applies to the renovation and restoration of roads.

However, due to the challenges involved in collecting the cess, the department found it difficult to manage the cess collections. As a result, GHMC would, therefore, collect the labour cess, and the same amount will be transferred to the Labor Department.

The decision of the GHMC to collect labour cess in advance is expected to bring relief to workers as all funds for benefits to labourers are sanctioned by labour cess.

By: Shailaja K