50% Covid rebate for additional FSI remains until project completion

20 Nov 2023 CW Team

The Bombay High Court declared that the 50% discount granted by the state government to developers for purchasing additional Floor Space Index (FSI) during the pandemic would remain applicable until the completion of projects. The court directed the BMC to revalidate or renew building permissions without requiring payment of the differential premiums.

According to a Government Resolution (GR) dated January 14, 2021, a 50% rebate on additional FSI was offered for on-going and new projects, provided the premium was paid by December 31, 2021. The GR also mandated builders to cover the entire stamp duty for buyers in the economically-weaker section, as well as those in the lower, middle, and higher-income groups.

Nine developers, including Prestige Estate Projects, Sugee Two Developers LLP, Ankur Premises Developers, Mayfair Housing, and Evershine Builders, approached the court, alleging that the BMC was not renewing permissions that had lapsed after a year, despite projects having commenced. The BMC was demanding a substantial premium for additional FSI.

In an October ruling disclosed earlier this month, a bench of Justices G S Patel and Kamal Khata observed that the rebate was a "one-off" and applied only to projects that had paid premiums by the deadline and had undertaken full absorption of the stamp duty liability.

The BMC argued that, according to the GR, developers had to initiate construction within a year of obtaining the Intimation of Disapproval (IoD) certificate, followed by the Commencement Certificate (CC). The builders contested that this was not specified in the GR. The High Court remarked, "Very often, developers are unable to obtain CCs for reasons out of their control."

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