Dear colleagues,
I wish to clarify issue bit more in light of above posts of Mr Ghosh and Mr Mehta . Legally, yes ,contractor has to obtain RC and pay@1% cess on new construction values if its Rs.10 lacs or more.This means that construction activities on extension of old or up gradation of previous jobs if done then cess is not applicable.In case contractor is liable but not paid cess if taken payment from company, then company is bound to pay to the authority while company can claim this with administrative costs from the contractor. In one of my client company, boiler plus chimney installation work was charged on full bill amount by ALC. Bill was without bifurcation of materials, labour costs and other incidental expenses . The activities were - jobs like designing ,fabrication of steel chimney , rent paid for crane for 23 days and fooding and transportation of men, materials and last was Cement, bricks, steel, concrete and sand plus meson and labour cost for exact work of plastering and erecting chimney . The said contractor had also done part jobs of construction, repair and wooden works of our GET hostel building and total cost was coming around Rs. 30 lacs. ALC was demanding ON full bill amount the construction cess but we replied and enclosed cess payment cheque on Rs. 6 Lacs . We replied that actual construction cost was Rs.6 lacs while bifurcation was also given and hostel work was shown as repair activitiesand claiked as exempted from cess applicability .ALC agreed to our stand. It is advisable that while construction activities are given to contractor then proper definition of activities will be supporting a lot with its meaning and you can easily reproduce things as a normal practice in case it is explainable from its begining through records.
Regds,
RDS YADAV
LABOUR LAW ADVISER
DIRECTOR-FUTURE INSTT. OF MANAGEMENT AND TECHNOLOGY