The Maharashtra Government’s move to cut stamp duty to 2 per cent from September to December 2020 and to 3 per cent from January to March 2021, may impact its collection of stamp duty and registration fees by about 30 per cent (approximately Rs 8,000 crore) by the end of fiscal 2020-21. Against the total collection of Rs 28,989.29 crore in 2019-20, the government is likely to mop up about Rs 8,000 crore less for 2020-21.
A senior official of the revenue department admitted that the government had decided to reduce the stamp duty to boost the real estate sector, which is passing through a difficult phase due to the economic downturn and the lockdown. He further informed, the stamp duty cut was applicable only for agreement for sale and not for other transactions.
‘’The stamp duty and registration fee collection was worth Rs 28,989.29 crore for a total 28.22 lakh agreements for fiscal 2019-20. Already the collection has been adversely impacted because of the Covid-19 crisis and the lockdown, as it was a paltry Rs 273.39 crore in April against Rs 1,603.19 crore for the corresponding period last year, Rs 414.75 crore in May against Rs 1,776.78 crore during the same time last year. After the 'unlocking' in June, there was a marginal increase, to Rs 1,260.54 crore against Rs 2612.69 crore last year, Rs 1,309.92 crore in July against Rs 1,898.49 crore. As on August 25, the collection has been Rs 1,212.18 crore against Rs 1,856.58 crore for August 2019,’’ said the official.
He said Mumbai, Thane, Pune and Nashik are high revenue collection divisions. "Although the government has cut stamp duty property buyers are facing a financial crunch and unless and until they have money to pay EMIs, they will not purchase. On the other hand, there is this view in the department that stamp duty reduction will boost property registration and the government can make up some of the revenue loss in the current fiscal,’’ he noted.
A senior MVA minister however, wanted builders and developers to reciprocate, by reducing property prices and thereby passing on the benefit to buyers.
Anand Gupta, Chairperson of Housing and RERA Committee of Builders Association of India, said, as the stamp duty reduction is timebound, it will induce buyers to purchase property in that particular time, to take advantage of the reduction. ‘’As the move is to boost real estate, this reduction should only be for under-construction property, otherwise buyers may opt for resale properties and completed projects. In the end, the government may not succeed in boosting real estate,’’ he opined.