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Social cess crackdown on the cards

The labour department plans to crack down on city builders ducking the net of mandatory cess aimed at social security and welfare of construction workers.

Birendra Kumar, deputy labour commissioner, Patna division, has asked Patna Municipal Corporation (PMC) to furnish a list of builders in the city for collection of cess as mandated by the Building and Other Construction Workers’ Welfare Cess Act, 1996.

In a letter dated November 22, 2013, to PMC commissioner Kuldip Narayan, Kumar said: “The collection of cess is not being done in the Patna urban area owing to unavailability of list of builders. According to the Building and Other Construction Workers’ Welfare Cess Act, 1996, every builder is supposed to pay cess at the rate of 1 per cent of the total cost of construction in each apartment. In case of non-payment of this cess, the builder concerned has to pay penalty at the rate of two per cent per month with compound interest.”

However, sources in the Bihar Building and other Construction Workers’ Welfare Board claimed that the payment of construction cess by builders in Patna has been negligible over the recent past.

According to sources, the funds raised through collection of construction cess are, at times, paid to Rs 15,000 to the labourers through cheque or demand draft by the chief minister in various welfare schemes.

Builders’ association in the city, on the other hand, claimed that payment against construction cess is in practice since 2007.

“Though the act came into force in 1996, but it was effectively implemented in Bihar from 2007 following a Supreme Court order in a similar case. The Builders’ Association of India is highly active in ensuring payment of construction cess across the country and so in the case of Patna. We have collected funds to the tune of Rs 132 crore through payment of construction cess during 2007-2012 but I agree that some smaller builders in the city are not paying the same,” said Sachin Chandra, state chairman, Bihar chapter, Builders’ Association of India, who is an ex-officio member of the labour cess committee.

There are around 150 builders in Patna, who are members of Patna chapter of Builders’ Association of India.

Chandra added that builders constructing apartments on their own have to pay construction cess on the total project cost including the value of land, whereas contractors are required pay the cess only on the construction cost.

Sources in the civic body on the other hand, claimed that no such list of builders in the city is available with them.

“Though we may furnish the names of builders known to us but a comprehensive list, as sought by the labour department, is not being maintained at the PMC at present,” said a senior official of the municipal corporation.