In a recent policy change, the Gujarat Real Estate Regulatory Authority (RERA) has exempted Ahmedabad Municipal Corporation (AMC) from seeking its counsel on real estate project cost assessments for construction cess calculations. This comes after concerns over developers understating costs, leading to revenue losses. The updated directive mandates officials to cross-check cost figures provided by developers in both building use (BU) and RERA applications. Officials are now also required to obtain a verified project cost from developers, eliminating the need for RERA consultations.
In a significant shift in Ahmedabad's town planning policy, the Gujarat Real Estate Regulatory Authority (RERA) has exempted the Ahmedabad Municipal Corporation (AMC) from obtaining its consultation for real estate project cost assessments, which determine construction cess rates.
The central matter pertained to the 1% state construction cess imposed on the overall project cost of any real estate endeavour prior to the city's civic body sanctioning building use permission (BU). Historically, there have been instances where developers understated these project costs in their BU submissions. This undervaluation led to substantial revenue losses, a concern raised by an official of the AMC.
Addressing this issue, RERA had previously instructed AMC's town planning department to liaise with it for an accurate assessment of project costs, ensuring the correct calculation of the construction cess. In adherence to this, a directive was released by the AMC town planning division on November 3, 2022, which mandated all concerned officials to work closely with RERA to ascertain the true project costs.
However, this additional layer of verification drastically increased the workload of RERA. Responding to this unforeseen strain on its resources, RERA communicated to AMC on August 21, suggesting that the civic body should forgo seeking their opinion on project cost estimations.
Consequently, on September 27, a new guideline was established. The town planning division circulated directives for officials to meticulously cross-check the project cost figures given by developers in both their BU and RERA applications. If both figures aligned without any discrepancies, authorities would then proceed to compute the 1% construction cess.
Additionally, officials are now required to secure a verified copy of the project cost presented to RERA by developers during their BU permission application phase. This step effectively obviates the need for any further consultation with RERA regarding project cost validations.
In conclusion, the recent changes in the town planning protocol in Ahmedabad aim to streamline the process of determining real estate project costs for calculating the construction cess, whilst ensuring accuracy and reducing the administrative burden on RERA.
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