SC Upholds Cess On Construction Industry

In a boon to millions of workers in the construction industry, the Supreme Court has upheld the validity of Parliament's decision to levy special cess on builders and contractors to create a corpus fund for providing welfare measures to the unorganized sector.

A bench of justices D K Jain and A K Ganguly, in a judgement, rejected the plea of the builders that cess was actually a tax and that there was no nexus between the levy and the intended purpose.

The apex court gave its judgement dismissing appeals of Dewan Chand Builders and other contractors challenging the levy as being beyond the competence of Parliament as it was being collected from construction industry alone in the form of a tax.

The Delhi High Court had earlier dismissed their plea challenging the cess levied under the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996.