Bldg cess defaulters asked to pay up in one go, hefty interest for delay

Thiruvananthapuram: A major drive to collect arrears on the building cess is on as the 2022-23 financial year nears its end. The campaign has given rise to a stream of complaints against excessive interest rates being imposed for delays and insistence on lumpsum payments. The cess goes to fund the Construction Workers’ Welfare Fund.

The Labour Department claims that Rs 3,000 crore in arrears remain to be collected. The aim is to collect at least Rs 1,200 crore before March 31. Each Labour officer has been directed to collect Rs 1 crore to Rs 2 crore a month.

The District Labour Officers are forcing the owners to make the payments in one go in order to meet the targets fixed in the intensive campaign to collect the arrears. An interest of 15% to 24% is being imposed if the amount is not paid within 20 days.

In some districts, after some building owners delayed payment of the arrears, attachment notices with 24% interest on the amount, were issued to them.

Building owners have not been extended the benefit of three instalments allowed for those who defaulted in the payment of cess on Construction Workers’ Welfare Fund. An amount of Rs 55 crore is required to run the pension scheme based on this Fund. The amount shoots up to Rs 65 core after taking into account other expenses.

Not only those who have built new houses but also those who have carried out repair works on old houses or added new rooms are required to pay the cess.

The house owners who arrive at the Labour office with the notice that they have received are told to produce the plan used for constructing the house years ago.

No instalments if...

The office of the Minister for Labour clarified that there is a provision to make the payments in three instalments and that the Assessment Officers have been empowered to take a decision on the issue. The amounts can be paid in three installments in three months. However, in revenue recovery cases, there is no provision for instalments.

Cess collection in panchayats

The cess of 1% imposed on the owners of houses and commercial buildings towards the Construction Workers’ Welfare Fund will be collected through local self-governments from April 1. The amount should be paid at the time of allotting the building number when the construction of houses or other structures are over.

Changes will be made in the software being used by local self-governments in order to enable this. Many of the house owners come to know that payment of such a cess is required only when they receive a notice years after they had built the house, asking them to pay the cess with penal interest.