Builders to pay pending fee for bylaw violation
Compounding fee is a financial penalty imposed when parts of buildings that are built in violation of bylaws face demolition
Dec 03, 2014
Source : The Times of India


GHAZIABAD: The Ghaziabad Development Authority has now discovered that many builders in the district had paid 'compounding fee' less than what was due from them from early 2012.

Compounding fee is a financial penalty imposed when parts of buildings that are built in violation of bylaws face demolition.

So the Authority is now pulling out all its old files concerning compounding fees received since 2012. It will send demand notices to the builders concerned for the "remaining amounts that were actually payable".

Revealing this to TOI, D P Singh, GDA officer on special duty, said, "We estimate that, once all the files are scrutinized, we will be able to send notices for the recovery of the actual compounding charges which run into about Rs 20 crore."

Explaining the "confusion about the actual rates payable" for compounding fees, Singh said, "It all began in 2012. The GDA rates for land were then lower than the circle rates decided by the district magistrate. Actually, the DM's rates were the real market rates. So, in 2012 the GDA fixed its rates at the same level as the DM's rates. But, soon after that, it became difficult to sell many GDA properties. That was because the buyers were made to cough up more. While the DM's rates were purely for the land, the GDA added 12% lease rent, 10% infrastructure charge and 7% stamp duty."

So in 2013, the GDA decided to freeze all its rates for two years, except the compounding fee rates. Against this backdrop, all notices that were sent out presupposed that compounding fee had also been frozen, which was not true. This led to the losses suffered by the GDA, Singh said.

Singh said almost all the arrears that have to come in, after the notices are sent out, will be from the Indirapuram zone, as that zone has seen most of the construction activity since 2012.

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