Hyderabad

Construction firms evading thousands of crores of building cess : CPI(M)

According to Building and Other Construction Workers Welfare Cess Act, 1996, 1% cess should be deposited with the Labour Department on construction of every building with over ₹10 lakh outlay.

According to Building and Other Construction Workers Welfare Cess Act, 1996, 1% cess should be deposited with the Labour Department on construction of every building with over ₹10 lakh outlay.

Communist Party of India (Marxist) has raised serious concerns about violation of the Building and Other Construction Workers Welfare Cess Act, 1996, according to which 1% cess should be deposited with the Labour Department on construction of every building with over ₹10 lakh outlay.

In a press conference on Tuesday, the party’s Greater Hyderabad Central City Committee secretary M. Srinivas and others alleged evasion of cess by the construction companies to the extent of thousands of crores of rupees, and demanded a white paper to be tabled on the amount of cess evaded since 2014. Welfare cess of ₹162 crore accruing from the construction of Hyderabad Metro Rail has not been paid so far. Receiving notices from the Labour Department, the concessionaire approached High Court and obtained stay order. Though five years have passed, no counter has been filed to get the stay vacated.

Though there are Supreme Court orders that a stay would stand automatically vacated after expiry of six months, the Labour Department has done precious little to recover the amount. Mr.Srinivas recalled the Delhi High Court judgement in 2011 that the cess must be paid by Delhi Metro Rail contractor, and demanded that the cess be recovered along with 2% penalty as per the Act.

During the the nine-month period between April and December last year, GHMC granted building permissions for a total of 16,789 structures, but welfare cess was paid only by 39 companies. In 2018, a total of 14,190 structures got permissions, as against the payment of cess only by 38 companies. A year before that, only six companies paid the cess against 8,704 structures given permission.

Though the State government directed the GHMC to charge the cess at the time of building permissions, the same is not being done. As per the alert notes sent by Vigilance to the Labour Department, ₹ 1,047 crore of cess has been evaded. Of this, only ₹89 crore has been recovered. Several notices sent to the builders in the purview of Rangareddy District Commissioner of Labour returned reportedly because the addresses were not found. Mr.Srinivas also alleged that the structures were not being assessed for their value, and even where cess is being paid, it is not scientifically calculated.

Even the cess paid is not being deposited with the Telangana Building and Other Construction Workers Welfare Board from the Pay & Accounts Department, he charged. Since 2014, the funds meant for welfare of the workers are being diverted by the government for other programmes, he said.

The ₹1,400 crore funds in the bank account of the Board at the time of State bifurcation have not been distributed between both the States, as both governments have entered into a dispute and shown no interest in resolving it.


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Printable version | May 22, 2022 2:02:24 am | https://www.thehindu.com/news/cities/Hyderabad/construction-firms-evading-thousands-of-crores-of-building-cess-cpim/article30677935.ece