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building construction

(Querist) 04 October 2010 This query is : Resolved 
Dear Experts pl. clear the following queries. it is very urgent.

1. Difference beween welfare fund & Labour cess & whose reponsibility is it.

2. Is there any ratio beween contract value & labour expenses. If we are using mechenised system in executing the work the labour componant wil be on lower side.

3. If the civil work being executed in exising factory by demolition part of it & rebuilding whether ESI & PF are to be levid

4. If ESI & PF are applicable to contractor, is taking a Workman Compensation Policy (W C ) is also to be taken & is it optional.
Hitender Gaur (Expert) 06 October 2010
1. Welfare fund is contributed by the construction co. for its own staff/labour, thier childern's medical, health and education etc. While LAbour cess is deducted from the Running Bill of Contractor just like TDS and deposited in Labour cess A/c( Maintained by Govt.) Rate of LAbour Cess is 1%.

2. There is no fix ratio between Contract Value and Labour expense as in construction a uncertinity always faund. But in Delhi VAT 25% of Work Done Value allowed as LAbour Component if wark is Civil, but if work is electrical then 15% of Work Done Value allowed as labour component. Duiring the scrutiny cases in 2003-04, 2004-05, 2005-06, 2006-07 Income tax department allowed 33% of Work done value as labour compnent to us.(But it is not any rule or guideline)

3. Yes if strenght of worker is more then 20 then from fist day ESI & PF are to be levid.

4.Please clear your this para what you want to say.

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