Rajasthan government plans to waive cess on EWS and LIG houses – ET RealEstate

JAIPUR: Developers constructing housing schemes for economically weaker sections (EWS) and lower income groups (LIG) may not have to pay the labour cess.

State’s labour department is mulling a proposal to waive off the cess, which is 1% of the total project cost as it would provide relief to the buyers.

The draft proposal has received a nod from the labour minister, Tika Ram and has been forwarded to the legal department. As per the estimation, there are 175 to 200 projects of affordable housing in the state, which have about 1 lakh housing units. The move will provide relief to all those buyers who will purchase plots in upcoming schemes as cost will be reduced.

An official said, “About 60 million square feet of construction has to be carried out in the approved ongoing projects. The construction cost is approximately Rs 7,200 crore. Labor cess is payable at 1%. On this basis, the cess amounts to Rs 7.2 crore. This amount is being proposed to be reduced in housing costs.”

Developers believe the move will directly benefit the LIG and EWS category. Rajasthan CREDAI chairman Gopal Das Gupta said, “The demand was also put forward by the developers to waive off the cess to benefit these categories. We would welcome the move as this was additional burden on poor.”

Vinay Joshi, chairman, Rajasthan Affordable Housing Developers Association, said, “In our representation, we have explained that the government’s intention is to benefit the EWS and LIG. The cess should not be imposed on this category. Our demand was considered and request has been forwarded to the Centre.”The official at the civic bodies believe this would also encourage the developers as it would give slight relief in investment.

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