Udaipur Labour Dept Cracks Down on Construction Cess Defaulters

Udaipur, Dec 22: The Building and Other Construction Workers’ Welfare Cess Act, 1996 (BOCW) is applicable in all districts of the State. Under this Act, a cess of 1% is payable on the cost of construction of all government, commercial and private (residential) buildings and construction works built after July 27, 2009. In Rajasthan, no category or type of construction work has been granted exemption from payment of the cess.

Owners/employers undertaking building construction are required to inform the Labour Department in the prescribed format within 30 days of commencement of construction work. The cess must be deposited with the Cess Collector within 30 days of completion of construction or determination of the cess amount, whichever is earlier. If the duration of a project or construction work exceeds one year, the cess payable must be deposited within 30 days of completion of one year. Employers may also deposit the cess in advance based on the estimated cost of construction.

The amount collected under the cess is spent on welfare schemes run for construction workers.

Divisional Joint Labour Commissioner Sanket Modi said that all government, commercial and private residential buildings and construction works built after July 27, 2009, fall under the ambit of the cess. Only residential buildings constructed at a cost of less than Rs 10 lakh are exempt from the cess. If a residential building is constructed at a cost exceeding Rs 10 lakh, a cess of 1% will also be levied on it. No exemption is available for commercial building construction.

Under this Act, during the financial year 2025-26, notices have been issued to 678 owners/employers so far, and 22 cases are under consideration for recovery action. In the financial year 2025-26, ex parte cess assessment orders have been issued against 10 employers. If the assessed amount is not deposited within the stipulated time, the cases will be forwarded to the District Collector for recovery.

Initially, building owners/employers are being given an opportunity to submit construction-related documents or explanations. If the cess is not deposited even after issuance of notice, the Labour Department will itself assess the construction cost and issue an ex parte cess assessment order against the building owner.

If the cess amount is not deposited within the due period, there is a provision to levy interest at the rate of 24% per annum on the employer. The Labour Commissioner has directed that notices be issued to the maximum number of building employers to ensure deposit of the cess, failing which ex parte action should be taken.

In addition, if payment is not made within the prescribed period from the date of the cess assessment order, there is a provision for a penalty of up to 100%. In case of non-deposit of the cess amount, recovery action will be taken along with interest and penalty, which may also include attachment of property.

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