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Labour Cess

LABOUR CESS


Labour cess @ 1% shall be deducted on the bills, payable to the contractor / executing agencies for the works covered by definition of buildings or other construction work as amended in G.O.Ms.No.57 LET & F(Labour-II), Dated: 26.06.2007.

I&CAD Department has issued Government Memo.No.636/Reforms-A1/2008, Dated: 08.06.2011 duly instructing to make 1% provision in the estimates for the work paid from 26.06.2007 wherever Agreements do not contain the clause relating to the condition of Building and other Constructions Workers Welfare Cess Act 1996 and the works continues for beyond twelve months and involves engagement of (10) workers and more.

The following course of action was agreed in the minutes of the meeting dated: 27.08.2011 convened by the Principal Finance Secretary regarding collection of Labour Cess.

  • An appeal to be filed by I&CAD Department comprehensively considering all the issues in various judgement particularly orders passed in W.P.No.11269/2009 and batch dated 20.10.2009.
  • There is no necessity of amending G.O.Ms.No.94, I&CAD Department Dated:01.07.2003.
  • I&CAD Department may suitably modify / withdraw memo.No.636/Reforms/A1/2011, DATED: 08.06.2011.
  • to withdraw the instructions issued in the U.O.Note No.4763/PFS.F8(A1)/2007-1, Finance (W&P) Department, Dated: 04.02.2008 & U.O.Note No.4763/PFS.F8(A1)/2007-4, Finance (W&P) Department, Dated: 28.02.2008 in consultation with the G.P.

The CE(R&B) CRN & MD APRDC, Hyderabad vide Circular Memo.No.MD/APRDC/GM/DCE11DEE-7/AEE-20/2013, Dated: 10.6.2013 has instructed not to provide Labour Cess in the Estimates and working estimates.

The ENC, PR Admn, Hyderabad vide Memo.No.T2/Labour Cess/2011-12, Dated: 12.02.2013 has instructed not to provide Labour Cess in the Estimates.

The General Administration (Vigilance & Enforcement) Department, Telangana State vide system Improvement Note NO.6 (6/V&E/E-III/2017), Dt. 31.5.2017 has recommended that 

  • Not to include 1% Labour Cess in the Estimates.
  • To recover 1% labour cess from the contractors w.e.f. 27.08.2011.
  • Not to provide Labour cess @ 1% w.e.f. 10.6.2013.

The ENC, RWS&S Department, Hyderabad vide Memo.No.AE/DEE(Vig)/V&E/Labour Cess/RSW&S works/17, Dated: 28.11.2017 instructed as follows:

  • Not to include 1% Labour Cess in the Estimates.
  • To recover 1% Labour cess from the contractors w.e.f. 27.08.2011.
  • Not to provide Labour cess in the estimates & working estimates as per Government instruction for the works sanctioned after 10.6.2013.
  • To incorporate the clause pertaining to Labour Cess deduction in the Agreement.

The CE(M), GHMC, Hyderabad vide Circular Memo.No.CE(M)/GHMC/TA-11/K10/2017-18/498, Dated: 01.08.2017 issued instructions as above.

Generally in the Agreement, the clause is incorporated at 70(O) of General conditions of the Contract.

The MA & VD Department, Telangana vide Memo.No.7815/C2/2017, Dated: 27.7.2017 instructed the MD, HMWSSB, ENC (PH) to implement the GAD Orders.

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