What You Need To Know About Labour Cess In Construction In Noida

In Noida, the district authority recently issued notices to real estate developers who defaulted on labour cess. Final notices were issued to recover Rs 100 crore as labour cess from developers of real estate in Noida. In case of non-compliance, defaulting builders may face sealing of their projects. PropGuide lists a few key facts about labour cess levied on construction projects in Noida:

1. The Noida Labour Department issued notice to builders to pay a labour cess of one per cent, for the first time, in 2010. Labour cess is collected under the Building & Other Construction Workers Act, 1996. The Act also offers benefits such as home loans, medical benefits and scholarships for registered workers. Labourers will receive benefits, if they work anywhere in Uttar Pradesh, as long as they are in the construction industry.

2. You need to pay the labour cess even if you are building a house for personal use if:

A. The building costs more than Rs 10 lakh, excluding the land.

B. You employ more than 10 workers..

This implies that most owners of property in Noida will have to pay labour cess.

3. If it is a construction project undertaken for the benefit of a government organisation of a non-governmental organisation (NGO), the contractor is expected to pay the cess. If it is a building constructed for a private employer, the employer would be expected to pay the labour cess. But, if the building is a residential project, the builder must pay the labour cess. The labour cess is one per cent of the construction cost, currently.

4. If a builder does not pay on time, he must pay an interest of two per cent on the amount he owes local authorities. If he refuses to pay, he must pay a penalty equivalent to the money he owes the district authority.