Corporation fails to collect Building and Other Construction Workers Welfare Cess as mandated by law

The Greater Hyderabad Municipal Corporation (GHMC), which never fails to collect property tax year on year from building owners, nor to penalise them under various schemes, has completely ignored its statutory obligation of collecting the Building and Other Construction Workers Welfare Cess from the builders as mandated by law.

The rules formulated in accordance with the Building and Other Construction Workers’ Welfare Cess Act, 1996, mandate the corporation to collect the cess of one per cent over the estimated cost of construction from the builders, when they approach for plan approvals.

As per the rule 4(4), wherever approval of construction work by a local authority is required, the applications should be accompanied by a crossed demand draft in favour of the Building and Other Construction Workers’ Welfare Board, for one per cent cess on the estimated cost of construction for the total project or for the period of one year.

G.O. issued

A GO too was issued in 2009 with guidelines for arriving at the estimated cost of construction excluding land value. The order explicitly asks the departments concerned with the approval of building plans such as Municipal Administration and Urban Development, Panchayat Raj, Industries and Commerce (in respect to APIIC and Development Commissioner, SEZs) to issue immediate instructions to the local bodies or authorities for collection of cess.

The cess thus collected should be remitted to the Labour, Employment and Training Department, after deducting one per cent of the total amount collected, towards processing fee. However, not even one rupee was remitted by GHMC so far, inform Labour Department officials.

“The need for collection of cess assumes importance in the light of a recent Kerala High Court judgment which held the apartment owners responsible for payment of the cess in the event of the builder escaping from it,” informed Joint Commissioner of Labour E. Gangadhar.

The department had also written to the GHMC Commissioner in July, 2013, seeking details of the cess collected between 2010 and 2012. Simultaneously, another letter was addressed to the Regional Deputy Director, Zone-VI of the State Audit Department, enquiring whether GHMC’s accounts had been audited with reference to collection of cess. “None replied,” said Mr. Gangadhar.

GHMC’s Chief City Planner G.V. Raghu, when contacted, claimed that the corporation is not bound by the orders issued by the Labour Department, and no orders for collection of cess were received from the MA &UD Department. Further, the corporation is already burdened with workload, and is not in a position to act on behalf of another department, he added.

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