Developers in the state are demanding reduction in penalty for defaulting deposition of BOCW (Building and Other Construction Workers) welfare cess.
As per rule, the project owners are required to pay BOCW cess of 1% for construction of a building costing more than Rs 10 lakh, within one month after completion. If they don’t deposit the amount, they would be liable to pay a cess of 2% per month (24 percent per annum).
Former chairman of Confederation of Real Estate Developers’ Associations of India (CREDAI), Gopal Das Gupta said, “Developers are facing the wrath of the coronavirus pandemic, many finding it difficult to sustain in the present market situation. We request the government to roll back its decision of imposing a 24% penalty and it should not be more than bank interest rates.”
The developers suggested that for delay in payment the cess should be charged at the rate of the State Bank of India (SBI) prime lending rate (PLR), like other states including Orissa. A developer said, “In other states, in case of default in payment, interest at the rate of SBI PLR is imposed and the occupancy certificate is not issued without realizing the total cess amount. The Raj government should adopt the same method.”
The stringent action was imposed after the labour department observed that most of the private sectors/owners in the state are not paying cess for construction of buildings. The rules were put in place two years ago after collection of cess from private sector/owners was reduced to half in 2020-2021.
An official said, “The implementation of welfare schemes is dependent upon the funds that are generated through the cess collection. The fewer collection of cess also leads to delay in implementation of these schemes.”
To recover the labour cess the department issue notices, if the builder/person doesn’t pay the cess, it collects the information about the person from the municipal corporation/JDA/UDH etc, from where the permission for construction of the building was received , and after making all the calculations, a notice has been sent again .
“If he still doesn’t respond or pay up, we write to the district collector concerned to direct the tehsildar to collect the cess through Public Demands Recovery (PDR) Act. If the person doesn’t pay, action is taken against the builder. Hence, there is no scope for escaping the cess.”