GST to staircase rules, Dharavi project seeks many exemptions

Indian Express

01-06-2025

From tax exemptions to waivers on charges for any deficiencies in staircase and open space rules, the Dharavi redevelopment project has sought several key exemptions that are pending government approval.
These, along with other issues awaiting clearance, were flagged in a presentation by the Navbharat Mega Developers Private Limited (NMDPL) — the special purpose vehicle (SPV) set up through a joint venture between Adani Properties Private Limited (80%) and the state government's Slum Rehabilitation Authority (20%) to execute the redevelopment project – during a high-level review meeting chaired by Chief Minister Devendra Fadnavis on May 28 at which the project master plan was cleared.
When contacted, a senior official with the housing department said while these pending issues are yet to be cleared by various departments, they are not a part of the master plan. 'The pending issues raised are important for the project, and the respective departments will follow procedures and take a final decision,' the official said.
According to NMDPL, these pending approvals are required to unlock land, complete legal formalities, reduce upfront costs, and proceed with housing and infrastructure components of the plan.
These include land transfers, waivers on tax and staircase/ open space premium, regulatory relaxations that would help NMDPL carry out the redevelopment, rehabilitate slum dwellers and utilise the land parcels — including Kurla Dairy land, Jamasp Salt Pan in Mulund, Aksa and Malvani, Deonar, and Arthur & Jenkins Salt Works — that have been allocated for rehabilitation of ineligible residents of Dharavi.
While the master plan envisages construction of 58,532 residential units and 13,468 commercial and industrial units on 116.6 acres of the existing Dharavi area for the rehabilitation of eligible residents, the NMDPL will utilise around 541 acres of land allotted to it across the city (outside of Dharavi) for construction of rental housing for ineligible residents. Besides, another 118.4 acres inside Dharavi, of the gross area of 620 acres, have been earmarked for commercial development.
The developer has flagged at least eight key issues awaiting government approval — across departments including housing, urban development, revenue and finance — and requested that the decisions be finalised by July to maintain project momentum. The project is scheduled to be completed by 2032.
NMDPL has requested final notification for reimbursement of State GST (SGST) paid on construction for 15 years in rehabilitation and 5 years in commercial units. This will help it to avail Input Tax Credit on the construction of rehabilitation as well as commercial units.
The proposal asks the state to consider the functions of the redevelopment project under Article 243W of the Constitution, enabling exemption from 18% GST on 'pure services' like consultancy, project management and design (fees).
A Government Resolution waiving or capping charges on the developer for staircase and open space deficiencies is pending with the Urban Development Department since January this year. These premiums or charges are applied when buildings/ projects have less open space or staircase area than required by rules. Waiving or reducing these charges would help lower the overall project cost.
The developer has sought approval to use 35% fungible floor space index (FSI) to increase the size of renewal tenements (units inside Dharavi) beyond the standard 405 sq ft. As housing societies demand more than the minimum 405 sq ft, the SPV proposes using 35% fungible FSI to accommodate additional area, subject to viability. A proposal on this was sent in March this year.
'By letter dated 23.10.2023 and 18.06.2024, housing department was asked to provide clarity (on the carpet area of renewal tenements),' the NMDPL has said.
So far, meetings have been held with the 18 housing societies inside Dharavi, and the developer has said the residents have been demanding a higher carpet area. As per regulations, the minimum carpet area is 405 sq ft.
The NMDPL has sought sub-leasing rights to transfer developed units on 21 acres of Kurla Dairy land to societies/ end users. It has said that implementation of the project on land given via government resolutions of the revenue and forest departments cannot be undertaken without such sub-lease.
Although a government resolution for allocation of 140 acres in Aksa and Malvani areas was issued in October 2024 and measurement was completed in January 2025, the NMDPL has said the Collector has not issued a payment demand notice, halting the possession of land.
The NMDPL has said the demarcation of core Dharavi land by the superintendent of land records has been pending for over nine months even as reminders were sent in April and May. It points out that the process is critical for plotting, layout design, and planning approvals.
The NMDPL has requested a waiver of stamp duty charges on long-term land leases, particularly those with central agencies like Railways, as government projects may be exempted from stamp duty under certain rules.
Meanwhile, Rajendra Korde, president of the Dharavi Residents Association, said the number of new units being constructed was far lower than the number of existing units. He said surveys should first be conducted properly and every tenant should be considered eligible. Korde also demanded that the project master plan should be made public, and suggestions/ objections should be taken from the residents.
According to the eligibility criteria for the redevelopment project, ground-floor residents who settled in Dharavi before January 1, 2000, can get a 350 sq ft house within Dharavi free of cost; those who settled between January 1, 2000, and January 1, 2011, can get a 300 sq ft house outside Dharavi for Rs 2.5 lakh under the Pradhan Mantri Awas Yojana (PMAY).
Residents of upper-floor structures built before November 15, 2022, and ground-floor structures built between January 1, 2011, and November 15, 2022, will be offered rental accommodation outside Dharavi. They can also opt for a 'hire-purchase' scheme for 300 sq ft houses.