AP High Court upholds 1% labour cess

By S A Ishaqui
Hyderabad, July 15 : The AP High Court on Tuesday held that the government can levy one per-cent labour cess on the firms and companies which are engaged in construction works based on the cost of construction incurred by the employer and not on the entire value of the work.
Justice N.V. Ramana, while disposing over 300 petitions filed by the construction firms and companies, observed that the procedure contemplated under the Building and other Construction Worker’s Welfare Cess Act 1996 and rules clearly show that deduction of cess by way of advance at a uniform rate was permissible.
The judge further observed that " in my considered view, it cannot be set to be illegal when the government have sought to collect the cess from the June 26, 2007 and not from September 26, 1996 the date on which the Centre issued notification for collection of the cess from the bills payable to the contractors on the cost construction incurred by the employer".