Confederation of Real Estate Developers Association of India (CREDAI) and Andhra Pradesh Real Estate Developers Association (APREDA) strongly objected to collection of labour cess even before the beginning of construction activity. The government collects one per cent of the total construction value as labour cess which is spent for the welfare of construction workers. For instance, the builders will have to pay Rs.10 lakh if the total construction value is Rs.10 crore.
It is being collected for the last seven years but now it has become bone of contention between builders and government authorities. The builders are willing to pay the amount during the construction but opposing its collection at the time of plan approval. CREDAI submitted a memorandum to the government authorities to allow the builder to pay labour cess in a phased manner in accordance with the construction schedule.
“Earlier, we used to pay labour cess up to one per cent of the total value during the construction of apartments. But now, we are forced to pay at the time of plan approval. Many builders take approvals and begin construction activity later. Some time, it may take three years too. Some times, construction may not be taken place if project is not viable,” said Gurugbilli Raju, CREDAI chairman, Srikakulam District.
Meanwhile, construction activity in Srikakulam district is dull with the skyrocketing of land values and construction material cost. Earlier, cost of square foot was around Rs.1,900 but it has gone up to Rs.2,300. An apartment cost is between Rs. 25 lakh and Rs. 29 lakh in Srikakulam.
