Whether you know it or not, the concept of contractors is very important in different sectors in India. From construction to infrastructure, there are different industries and projects that depend on the services provided by contractors.
If you are not sure what is a General contractor, then you need to know that they are the channel between project owners and skilled workers. They are responsible for the smooth execution of projects while providing employment opportunities to people. This blog will present you with the basic information that you need to know about the role of contractors in India, the rules associated with them and the primary types of contractors present.
Exploring the definition and the role of a contractor
Commonly known as the “principal” or “employer,” a contractor is an individual, company, or organisation that contracts to provide goods or services to another party. Along with the agreed-upon compensation, the contract lays out the terms, conditions, and certain duties the contractor must perform.
One of the most important things that you need to know is that there are primarily two different types of contractors that you will find in India. The above definition tells what is a general contractor, and along with that, you need to know about the main categories of contractors.
- Construction Contractors design and build roads, bridges, buildings, dams, and other infrastructure physically. Managing everything from labour and supplies to machinery and project schedules throughout the whole building process falls to them.
- Conversely, service contractors provide specific services, including IT, maintenance, cleaning, security, consulting, and other such offerings. Often, recruiting them to manage certain jobs or responsibilities, they might not have the internal expertise or resources to manage businesses and organisations.
Important Rules and Regulations Related to Contractors
We have already specified what is a general contractor do; however, working as a contractor or with a contractor requires you to properly understand the legal rules and guidelines that they are subjected to.
- Indian Contract Act, 1872: This particular act is the foundation of a contractor’s work in India, as it states the basic principles of contract law and properly enforces the contract between two parties.
- Labour Laws: Labour Laws are created for the labourers working with the contractors, as they need to adhere to these laws (the Minimum Wages Act, Employees’ Provident Fund and Miscellaneous Provisions Act) to ensure the protection of the working force.
- Taxation Laws: Contractors are also subject to certain taxation laws, as they need to pay taxes like the income tax, goods and services tax (GST) and for the successful operation of their business.
Additionally, there are industry regulations that they need to stick to depending on the industry in which they are working.
