Kerala Govt’s construction workers’ welfare fund cess collection a body blow to common man

House Construction (Photo - Shutterstock/Sabeeq Palayil)
Owners of buildings having a total construction cost of Rs 10 lakh and above have to remit one percent of the total construction cost to the Construction Workers Welfare Board as cess. Photo: Shutterstock/Sabeeq Palayil

Thiruvananthapuram: The construction workers’ welfare fund cess that the Kerala Government has introduced has now come as a bolt from the blue on the people.

Owners of buildings having a total construction cost of Rs 10 lakh and above have to remit one percent of the total construction cost to the Construction Workers Welfare Board as cess. The cess will amount to an average of Rs 10,500 to Rs 45,000, according to the size of the buildings. If the construction cost shoots up, the cess amount will also go up. Buildings constructed since 1995 have now received notices from the Labour Department asking to remit the cess. The deadline for the same is March 31.

People have come to know about the cess only after receiving the notice in this regard. Those who built houses availing of loans are scurrying to raise money to pay the cess. The buildings constructed before 1995 and those built under Life Mission Project don’t have to pay the cess. However, if the cost shoots beyond Rs 10 lakh, the cess will be applied. According to the Government, the welfare pension and other benefits for the workers are paid from the corpus made by accumulating the cess contribution by individuals while constructing buildings.

However, even after collecting the cess, the pensions have been pending for the past six months. When the payment for contractors is given by the Government, one percent of the same goes to the welfare fund of the construction workers. As their contribution, a sum of Rs 280 crore was collected from the construction labourers in this fund. Even after all these, the benefits are not properly disbursed to the labourers. The Government was given Rs 515 crore as loan by pawning the fixed deposits of the Construction Workers Welfare Board from 2014 to 2018. The Board authorities said that the Board has been able to get back the loan amount and no loan was extended to the Government since 2018.

While constructing new buildings, the Revenue Department has to be given a one-time tax according to the size of the building. If the size is beyond 3000 sq ft, apart from the one-time tax, a luxury tax has to be given every year.

These taxes come into force on April 1.
• It has been decided to effect a reasonable increase in the permit fee for buildings, including houses, in municipalities from April 1, 2023. The rates will be decided later.

• From April 1, the property tax on buildings will be increased by 5%. The buildings which will be constructed from next year will carry the new rates. Also, the concessions for eligible people in this regard have also been fixed. Earlier, the concession was for BPL sections having up to 30 sq meters. However, from now on, buildings of up to 60 sq meters that are used as own dwellings will not carry property tax. This concession is not applicable to flats. If unauthorized construction is detected in inspections, they will be charged tax up to three times the normal rates. Proceedings also will be initiated against them. The houses having an area up to 1500 sq ft have been exempted from the clause of three times property tax levy.

• The stamp duty while transferring a flat/apartment to another person within six months of construction has been raised from 5% to 7%.

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