In a significant order aimed at safeguarding the welfare and social security rights of construction workers, the Chamba Labour Department has directed JSW Energy to deposit an outstanding labour welfare cess of Rs 8.89 crore for its 240 MW Kutehr Hydroelectric Project on the Ravi river in Chamba district.
The assessment proceedings relating to the project have been completed by the Labour Officer-cum-Assessing Officer, Chamba Zone, under the Building and Other Construction Workers Welfare Cess Act, 1996.
According to the assessment order, the company’s total labour welfare cess obligation has been fixed at Rs 18.56 crore. JSW Energy has already deposited Rs 9.67 crore based on self-assessment. However, the department found that an additional Rs 8.89 crore remains payable and has directed the company to deposit the amount with the Cess Collector, Chamba Zone, within 30 days.
The assessment authority took note of the company’s alleged failure to furnish adequate documents and an auditor’s certificate during the proceedings. It also cross-verified the company’s submissions with official records filed before the Haryana Electricity Regulatory Commission (HERC), which reflected the project’s total estimated cost at Rs 2,974.74 crore.
In its 21-page order, the authority observed that while the company had relied on the full project cost as the capital base before the regulatory commission to support power tariff calculations, it sought to exclude GST and other components to reduce its labour welfare cess liability. The arguments were rejected.
Citing judgments of the Supreme Court and High Courts, the order clarified that only specific heads such as land cost, pure supply contracts, compensation payments, pre-operative expenses, LADA contributions, finance charges and Interest During Construction (IDC) are eligible for exemption from cess calculations. The cess, it noted, remains applicable on civil construction and technical installation works.
After allowing exemptions amounting to Rs 1,117.85 crore, the department fixed the net construction cost at Rs 1,856.89 crore. Applying the statutory cess rate of one per cent, it assessed the total cess liability at Rs 18.56 crore.
District Labour Officer Anurag Sharma said the department was committed to safeguarding the welfare of construction workers and ensuring compliance with statutory social security obligations. He said that JSW Energy must deposit the outstanding cess amount within the stipulated timeframe.
