The UP cabinet has approved a proposal to levy a 'metro and RRTS cess' on developers in cities where these services are being developed, initially in Ghaziabad and Meerut. The cess will be implemented within a 1.5-kilometer radius of the metro or RapidX corridor. The decision aims to generate revenue for the cash-strapped Ghaziabad Development Authority. Developers' associations are awaiting the official notification before deciding on their response. The cabinet's approval signifies a policy decision that may extend to other districts as well. Legal challenges to the decision remain uncertain pending the notification.
The UP cabinet has given its approval to levying a 'metro and RRTS cess' on developers in cities where these two transformative services are underway. This progressive measure is initially slated to be implemented in Ghaziabad and Meerut, the sites of the upcoming RapidX corridor, or RRTS. Authorities have been tasked with formulating the intricate details before issuing an official notification. In Ghaziabad, it is expected that the cess will be applicable within a 1.5-kilometer radius of either the metro or RapidX corridor.
Sources say nothing has been finalized yet, including the specific area and the rate at which developers will be charged. However, it is likely that the Ghaziabad Development Authority will consider a 1.5-kilometer stretch along both corridors for the cess since areas in close proximity to the metro or RapidX lines and are deemed "influence zones”.
For the cash-strapped Ghaziabad Development Authority (GDA), this decision comes as a much-needed respite. In 2014–15, the GDA had previously imposed a metro and Hindon elevated road cess on builders at a rate of Rs 750/sqm. However, this move was challenged by a group of 27 builders, resulting in a ruling by the Allahabad High Court in 2021 that favoured the developers. The court instructed the GDA to refund the approximately Rs 50 crore it had collected during the approval of building layouts. The recent cabinet decision offers the GDA an alternative avenue to boost its revenue stream. An official from the GDA mentioned that they are yet to review the cabinet note, and until a formal notification is issued, they cannot provide further comments.
The Confederation of Real Estate Developers' Associations of India (CREDAI) expressed their intent to wait for the official notification before determining their course of action. Gaurav Gupta, the secretary of CREDAI's NCR chapter, highlighted that when the GDA previously imposed a cess on areas along the Hindon elevated road and Delhi Metro's Red Line, they claimed that builders in localities such as Raj Nagar Extension would directly benefit from these projects. However, the decision was deemed arbitrary, prompting them to approach the high court.
Gupta added that the cabinet's approval of the proposal marks a policy decision that will be implemented in other districts as well, making it a broader matter beyond the purview of the GDA alone. Regarding any potential legal action, Gupta mentioned that they have yet to make a decision. They are uncertain about the viability of challenging such a decision and intend to wait for the official notification before taking further steps.
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