The Maharashtra government on Tuesday introduced a Bill in the State Assembly to amend the Maharashtra Stamp Act, proposing that no refund or concession of stamp duty will be granted if a Development Agreement is cancelled, rescinded or terminated under any circumstances.
Revenue Minister Tables Amendment to Plug Existing Legal Gaps
The amendment Bill was tabled by Revenue Minister Chandrashekhar Bawankule, who said the proposed changes seek to plug loopholes in the existing law that have led to a growing number of stamp duty refund claims and consequent loss of revenue to the state exchequer.
According to the government, under the current provisions of the Maharashtra Stamp Act, stamp duty is levied on the execution of a document and not on whether the transaction is eventually implemented. However, in recent years, several parties executing Development Agreements have sought refunds after cancelling or terminating the agreements due to commercial disputes, financial reasons or mutual consent. Such claims have increased substantially, resulting in administrative difficulties for the Revenue Department in verifying the genuineness of each case.
Applicants Invoke Sale Agreement Refund Provisions for Development Deals
The government stated that the existing provisions, particularly those relating to refunds under Sections 47 and 48 of the Act, were intended to provide relief in limited cases, primarily where agreements for sale are cancelled before possession of the property is handed over. However, since Development Agreements and certain other instruments attract the same rate of stamp duty as agreements for sale, applicants have been invoking these provisions to claim refunds, creating what the government described as an unintended legal loophole.
To address this issue, the amendment proposes to insert a clarification after the proviso to Section 48, explicitly stating that the relaxation or refund provisions applicable to agreements for sale will not extend to Development Agreements or any other instruments that attract an equivalent amount of stamp duty.
The government maintained that the amendment is necessary to ensure uniform implementation of the Maharashtra Stamp Act across the state and eliminate ambiguity in the interpretation of refund provisions. Officials believe the change will not only protect government revenue but also curb misuse of the law while bringing greater transparency and certainty to the functioning of the real estate sector and the stamp duty administration.
The Bill is expected to be taken up for further discussion and approval during the ongoing monsoon session of the Maharashtra Legislature. If passed, the amendment will significantly alter the stamp duty refund framework by making Development Agreements ineligible for refunds even if they are subsequently cancelled or terminated.
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