Dharavi Redevelopment Project Seeks GST Waiver and Open Space Relaxation
The Dharavi slum redevelopment project — one of India’s largest urban renewal plans — is seeking major tax and regulatory exemptions from the Maharashtra government and relevant authorities. The focus keyphrase here is GST waiver Dharavi redevelopment, which has become central to recent discussions on reviving this long-delayed project.
Led by the Adani Group, the ₹23,000 crore initiative has reached a critical stage where legal and policy support will determine its pace and success.
Key Demands: GST Waiver and More
The Dharavi Redevelopment Project (DRP) has sought the following major concessions:
- GST Waiver on the cost of construction for rehabilitation units
- Relaxation of staircase regulations to accommodate more housing units
- Reduced open space requirement in slum rehabilitation buildings
- Exemption from Development Charges and Premiums under the Unified Development Control and Promotion Regulations (UDCPR)
- Transfer of government land parcels at concessional rates or free of cost
- Simplified approvals through a dedicated fast-track cell
Why the GST Waiver Matters
GST currently applies at 18% on under-construction projects, barring exemptions for affordable housing under specific schemes. In large-scale slum redevelopment, especially under public-private partnerships, this tax burden inflates project costs significantly.
For developers like Adani Realty, waiving GST on construction for rehabilitation units could:
- Lower the overall project cost by hundreds of crores
- Improve financial viability
- Accelerate construction and delivery timelines
This aligns with past CBIC clarifications that allowed concessional or zero tax under specific affordable housing schemes notified by state governments.
Legal Angle: Can GST Be Waived?
As per the CGST Act, 2017, the power to grant exemptions lies with the GST Council, based on recommendations from state governments. Maharashtra may propose such exemptions under:
- Section 11(1) of the CGST Act – Power to exempt goods/services
- CBIC Notification No. 3/2019-Central Tax (Rate) – Allows reduced GST for affordable housing
However, this would require concurrence from both the Centre and the GST Council, making the process layered and policy-driven.
Open Space and Staircase Relaxation: Why It’s Critical
Standard building norms require:
- 10–15% open space for public use
- Two staircases for multi-storey buildings (as per National Building Code)
For ultra-dense zones like Dharavi, developers argue that applying these norms rigidly would:
- Limit vertical development
- Force relocation outside Dharavi
- Delay project timelines
Instead, they’re requesting contextual exemptions based on slum rehab policies — similar to past concessions offered in Mumbai under the DCR 33(10) scheme.
Expert View: Urban Planner’s Take
“Waiving GST and easing open space norms could fast-track rehabilitation and unlock private investment, but these exemptions must be time-bound and transparent to prevent misuse,” says Rajiv Mishra, architect and professor at JJ School of Architecture.
FAQs: GST Waiver Dharavi Redevelopment
Q1. Is GST applicable on slum rehab construction?
Yes, unless exempted under a government scheme. Developers often pay 18% on construction services.
Q2. Can GST be waived for a specific project like Dharavi?
Yes, via notification under CGST Act if proposed by the state and approved by the GST Council.
Q3. Why relax open space rules in Dharavi?
High population density makes standard norms impractical without displacing residents.
Summary
The Dharavi slum redevelopment project is seeking GST waiver and relaxation of staircase and open space rules to cut costs and speed up rehabilitation. These exemptions could redefine how mega slum projects are executed in India.
Final Thoughts & CTA
The Dharavi project, if approved with these exemptions, could set a precedent for future urban redevelopment models across India. But it also raises questions about balancing tax concessions with public accountability.