Chandigarh, December 10
The Punjab government has imposed 1 per cent cess on all construction activity in the state hoping to get it out of the “financial mess”. Notified by the Department of Labour for the purpose of generating Building and Construction Workers’ Welfare Fund, the money will be part of the state fund to be used for “social security schemes”.
Now no building plan will be approved without charging 1 per cent cess on the cost of construction.The only exemption will be for a residence with construction cost less than Rs 10 lakh. Cess will also be applicable in case of group housing societies.
The imposition of the cess has been necessitated for the implementation of the Punjab Building and Other Construction Workers’ (Regulation of Employment and Conditions of Service) Rules, 2008, and the Acts pertaining to the service conditions and welfare of construction workers.
The imposition of a cess at a time when the state is feeling the impact of global economic slowdown is being viewed with scepticism and it is felt it has been imposed to generate revenue for the cash- starved state rather for the welfare of construction workers.
Deputy secretary, Labour, S.S Sandhi has asked all heads of departments to ensure implementation of the cess. The Labour Department has clarified that the cess will be imposed on constructions, alterations, repair, maintenance, demolitions of or in relations to buildings, streets, roads, Railways, tramways, airfields, irrigation drains, etc.
The cess will also be imposed on the installation of electric and telephone lines, putting up of towers, etc. But it will not apply to construction covered under the factories Act, 1948. The cess will
be imposed on the cost of construction, but shall not include the cost of land. The local authority will collect cess before according approval for construction.
Under the Building and other Construction Workers’ Welfare Cess Act, 1966, PSUs and government bodies like boards, corporations, etc shall deduct cess at source @ 1 per cent of the cost approved per tender notification from the bills of the contractors at the time of making payment and remit the same to the Punjab Construction Workers Welfare Board. The same will hold true for work undertaken on behalf of PUDA, GMADA, GLADA, etc.
The move is likely to affect infrastructure projects in the state at a time when it is finding it hard to attract investment. Besides, the move also has the potential of unleashing inspector raj in the state again.
