Developers seek cut in stamp duty

The Gujarat Chamber of Commerce and Industry (GCCI) along with the Gujarat Institute of Housing and Estate Developers (GIHED) and Federation of Real Estate and Developers Association of Gujarat (FREDAG) has demanded that the state government slash the stamp duty to 2 per cent from the existing 4.9 per cent in the upcoming Budget.

This move, according to developers, would not pinch the state as the rates of new jantri, regarded as the ready recknor for stamp duty, are already higher by 50 per cent.

"The new jantri is higher by 1.5 times and in April every year it is further increased by 5 per cent implying that currently the rates are higher by 1.575 times. This year again, the jantri will be revised," said developer Vijay Shah, executive member of GCCI.

The GCCI delegation led by its president Paru Jayakrishna made its presentation to state finance minister Vajubhai Vala and minister of state for finance Saurabh Patel on Monday.

They have also demanded that the registration charges, which is uniform at 1.5 per cent currently, be changed to Rs 250 for properties under Rs 2 lakh. It should be Rs 500 for properties in the range of Rs 2-5 lakh while Rs 1,000 for those between Rs 5 lakh and Rs 10 lakh.

"For properties over Rs 10 lakh, the registration should be 0.5 per cent," Shah added.

"We have seen that whenever there is a slash in stamp duty, the participation has increased. So, if the stamp duty is reduced to 2 per cent the government will only benefit," said Jaxay Shah, former president and a member of GIHED. The organisation has demanded that stamp duty be 'VATable'.

Developers have also demanded that stamp duty be abolished for women.

"This move will encourage more properties to be registered in the name of women giving them ownership rights," said a developer.

For the economic weaker section (EWS) housing, there should be no stamp duty for those properties that are below Rs 2 lakh. It should be 0.5 per cent for those between Rs 2 lakh and Rs 5 lakh, 1 per cent for houses in the range of Rs 5-10 lakh and for units above Rs 10 lakh, the stamp duty be 2 per cent.

Besides, for mining lease where the government is already charging royalty, stamp duty should be slashed. Also, for land that is being auctioned by urban authority bodies like the Ahmedabad Urban Development Authority (AUDA) or in the case of GIDC land, there is a lack of co-ordination in stamp duty assesment.

"Due to this there is overassement of stamp duty. The authority expects the buyer to pay more stamp duty as compared with the actual duty calculated on the basis of the price at which the plots and sheds have been auctioned," a member of GIHED told Business Standard.