1% Construction Cess Now Mandatory: Centre Issues Fresh Labour Code Notification:

1% Construction Cess Now Mandatory: Centre Issues Fresh Labour Code Notification The Ministry of Labour and Employment recently shared a notification (No. S.O. 2322(E)) on May 8, 2026, regarding the levy of cess on the cost of construction under the Code on Social Security, 2020.

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The Central Government, in exercise of the powers conferred by section 100(1) of the Code on Social Security, 2020, hereby prescribes that the employers engaged in building or other construction work shall pay a cess equal to one per cent. of the total cost of construction. This new rule replaces an older notification that was issued on 26th September 1996 by the Ministry of Labour.

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Note: This 1% cess will apply from the date the notification is officially published in the Government Gazette.