In a recent policy change, Haryana labor department vides its Office Order 245 has hiked the cess that is collected on construction of residential, commercial, industrial and institutional etc. buildings across the state to the double of the previous rate. The state government intends to use the collected cess money to provide various benefits to building and construction workers registered with the labor department in Haryana.

The cess is charged from the employer of the construction workers and cess assessment is done on calculating the minimum rates/norms for the estimation of the cost of construction of different types/categories of buildings equivalent to the PWD (B&R) construction rate. This order is in accordance with the provisions of the Building and Other Construction Welfare Cess Act, 1996.

The revised rates “per square feet” of covered area are provided for the following categories:

• Residential: ₹1,447 (individual constructed house), ₹1,916 (housing/cooperative societies).
• Commercial: ₹2,490 (multi-storied office &medium type showroom), ₹2,586 IT and shopping complex with superfine construction.
• Educational, Institutional, Training Centre: ₹1,916 formedium/superfine type construction.
• Hall/Community Centre/Dharamshala: ₹2,107 (for superfine construction), ₹1,916 (medium-type) and ₹ 1,668 for Dharamshala.
• Industrial building:₹1,813 (with RCC roofing); ₹ 1,741 (with ACC/GI sheets roofing), ₹1,916 (office block having superfine and medium-type construction).
• Hotels & Clubs: ₹2,988 (with five star and above facilities); ₹2,490 (with three star and four-star facilities) and ₹ 2,107 (f below three-star facilities).
• Dhaba: ₹2,107 high class facilities, ₹1,519 (with medium class facilities); ₹1,447 (low class facilities).
• Hospital’s buildings:₹2,750 (with superfine construction), ₹ 2,455 (with medium construction) and ₹2,258 (for the purpose of nursing homes/ dispensaries simply constructed).
• Buildings for Social use: ₹2,758 auditorium (‘A’ type construction), ₹2,490 (medium type); ₹2,299 banquet hall (superfine construction), ₹ 2,299 medium type
• Religious buildings: ₹1,447 per square feet.

For determining class ‘A’ (superfine), ‘B’ (medium-type) and ‘C’ (simple) constructions the parameters used are sanitary fitting materials, flooring materials, quality and type of wood, provision of escalators, basement, storeys of the building, air conditioning system, stone used etc.

The order further adds that the revised rates will be applicable from the date of issue of the order. If, the date of commencement of construction (completed/under construction) is prior to the issue of this order and any cess amount in advance is already deposited then the construction cost in proportion to the amount of advance will be calculated on the basis of previous minimum suggestive rates of construction.

If at any stage, it is found that the actual cost of construction is more than the minimum rates, then cess would be payable on the actual cost incurred; in case of any dispute regarding the type of building or the rates not been covered in the given list, the assessing officer will forward the case to the headquarters along with the assessment and recommendation in the matter.

In the aftermath of the COVID-19 pandemic, the rates revision will certainly impact the construction cost of the projects.

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BA.LLB Sunidhi Singh

Sunidhi Singh, a BBA.LLB graduate