Developers along Dwarka E-way face 1% registration cess

Setting a new model for road development, the Union government is looking to impose a 1 per cent levy on registration of real estate developed along the Dwarka Expressway in the National Capital Region. The development charge is likely to replace toll collection on the highway though the revenue realisation is likely to be lower.

The Union government is mulling a toll-free run on the Dwarka Expressway. The National Highways Authority of India (NHAI) could earn revenue through this levy. The Dwarka Expressway is also called the Northern Peripheral Road and is a 27-km-long connectivity project from Rangpuri in Delhi to Kherki Daula village on NH-8 in Gurugram. Construction work on the eight-lane Dwarka Expressway, which will connect Dwarka to Kherki Daula on the Delhi-Gurugram Expressway, started in 2008.

The project was planned as an alternate route between Delhi and Gurugram and was expected to reduce congestion on the Delhi-Gurugram Expressway. It also includes connectivity with the Central Peripheral Road and Southern Peripheral Road, which were handed over to the NHAI after the Haryana Urban Development Authority (HUDA) failed to execute them. The project received national highway status in June this year.

If the proposal goes through, the project will become the first of its kind to have a levy on real estate sold alongside the road instead of a toll plaza. According to an official, however, the government may not be able to break even through this levy, but will be able to recover 50 per cent of the amount that it stands to lose by way of toll collections. Also doing away with the toll plaza means that the expressway will allow seamless travel.

Currently, real estate prices are muted and in this market any further rise in property prices may have an adverse impact. However, some experts have a different take on the matter. “If the NHAI can complete the project in the next one or two years, people will not mind paying an additional one per cent,” Mudassir Zaidi, executive director-north, Knight Frank, said. He added even though it was an additional cost, project delay was causing value erosion for real estate development. Earlier in 2013-14, a similar proposal was mooted by the Ministry of Road Transport and Highways to make the Delhi-Jaipur Expressway more attractive to bidders. The central government had thought of levying a development charge on land deals along the expressway. The alignment for the new Delhi-Jaipur Expressway is yet to be finalised.