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Notices to builders for not paying labour cess

The objective of the cess was to use the funds for the welfare of the construction workers.

The state labour department has issued notices to builders who have failed to pay construction workers’ cess. In fact, the department has gone to the extent of publishing the names of the defaulting companies on newspapers.

As per the Building and Other Construction Workers’ Welfare Cess Act, 1996 which came into effect in the state in 2009, the builders are required to pay 1% of the construction cost of a project as labour cess within 30 days of the completion of the project. 

The objective of the cess was to use the funds for the welfare of the construction workers.

But many builders in the state said that the government was never serious in collecting the cess and has started issuing notices around two years ago with interest on the due amount and penalties.

While some companies have paid the cess with interest and penalties, there are cases of dispute as in many cases the joint venture partners of projects have exited and are not willing to pay their part at this time now.

“The company exists but the partners have exited the projects. It is not easy to collect their part of the cess now. Had the government started collecting the cess in time, we would not have come to the current situation now,” said a developer preferring anonymity.

He said by advertising the names of the builders who have not paid is like naming and shaming them which brings disrepute to the whole builders community.

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