Levying of 18% GST coupled with the rise in the jantri rate, has kept buyers off Ahmedabad Municipal Corporation’s (AMC) recent auctions of plots. A total of seven plots in some of the prime areas of the city were in offing with a base price of Rs 499.72 crore.
These plots were located in Bodakdev, Thaltej, Vastral and Nikol. Not a single developer showed interest in any of the plots which were in the offing for 99-year lease.
“A recent government notification on charging 18% GST on any plot being offered for 99-year lease together with the rise in jantri rates were the main reasons for the bidders to avoid plot auctions,” said a senior AMC official in the estate department.
The AMC, which is already reeling under a financial crisis, had expected Rs 600 crore from these auctions. The auction deadline ended on Friday.
The AMC was forced to take a loan of Rs 700 crore from GSFS to carry out development works in the city and meet the daily expenses. The civic body has already borrowed Rs 3,000 crore from the World Bank to carry out strengthening of existing storm water drain and sewarage network. The AMC has a debt of Rs 1,317.67 crore.
“We had expected a good deal from the auction in Bodakdev and Thaltej,” said the AMC official. He said, “On January 12 last year, the AMC had tried to auction these seven plots, including the one in Bodakdev, for commercial purposes at a base price of Rs 2.28 lakh. The total cost of the plot was 172.75 crore. This is the highest base price so far.”
The registration date for the auction of all these seven plots was February 14, but none of the city’s developers showed interest. The deadline was extended by one month to March 14.
Even after this extension there were no takers. Senior AMC officials say that it is unlikely that the plots will be put up for auction for next six months now.