Patna: The Bihar government has raised the cost threshold for the 1% Labour Welfare Cess on building construction from Rs 10 lakh to Rs 50 lakh, providing relief to people constructing homes, shops and other buildings below the new limit.
The decision has been taken by the Department of Labour Resources and Migrant Workers’ Welfare. Under the revised threshold, the 1% cess will apply only to construction projects costing more than Rs 50 lakh.
Previously, the cess was applicable to construction projects exceeding Rs 10 lakh.
Cess Linked To Total Construction Cost
The Bihar Building and Other Construction Workers’ Welfare Board collects a cess equivalent to 1% of the total construction cost of private and government projects.
According to departmental rules, information about a construction project must be submitted through Form-1 within 30 days of work beginning. The applicable cess is then required to be paid to the Cess Assessment Officer.
The funds collected through the cess are deposited with the Welfare Board and used for schemes benefiting registered construction workers.
More than 46 lakh workers are currently registered with the Board, according to the department.
Urban Bodies To Facilitate Collection
Urban local bodies have been entrusted with initiating cess collection when building plans are approved.
The cess is payable to the Deputy Labour Commissioner, who also functions as the Cess Assessment Officer. If a builder fails to submit the required information, the assessment officer can initiate appropriate action after receiving information about the construction project.
Those who fail to deposit the cess within the prescribed period are liable to pay 2% interest per month on the delayed amount.
GIS Technology To Strengthen Assessment
The department is also using GIS technology to improve the assessment and collection of construction cess.
The system is being implemented in Patna, Gaya and Muzaffarpur, while GIS mapping has already been carried out in Danapur, Khagaul, Patna, Bodh Gaya and Gaya.
The department plans to extend the system to other districts.
The initiative is aimed at improving cess collection while ensuring that more registered construction workers can access welfare schemes funded through the levy.
Rs 113 Crore Collected So Far In 2026-27
The department said Bihar has collected Rs 113 crore in construction cess during the current financial year up to May.
The state collected Rs 755.56 crore in 2025-26, while the highest collection in recent years was Rs 768.63 crore in 2024-25.
Construction Cess Collection
| Financial year | Cess collected |
|---|---|
| 2019-20 | Rs 289.75 crore |
| 2020-21 | Rs 329.97 crore |
| 2021-22 | Rs 372.97 crore |
| 2022-23 | Rs 464.69 crore |
| 2023-24 | Rs 694.80 crore |
| 2024-25 | Rs 768.63 crore |
| 2025-26 | Rs 755.56 crore |
| 2026-27 (up to May) | Rs 113 crore |
The government says the revised threshold will reduce the cess burden on smaller construction projects while maintaining a funding mechanism for welfare programmes for construction workers.
