Ready Reckoner (RR) rates, an annual statement of rates on which the stamps and registration department collects stamp duty from property purchasers, have increased across Maharshtra by an average 25 per cent, in an annual revision by the state government at the year-end.
“It has been the department’s efforts to match these rates with the prevailing market rates. Property buyers will have to pay additional duties and taxes based on RR rates,” Revenue Minister Balasaheb Thorat told Business Standard.
The new rates, to be charged in different zones at five per cent, 10 per cent, 20 per cent and 30 per cent, come into effect from tomorrow.
The increase in RR rate was an average 18 per cent from January 1, 2012.
Thorat informed that during his three year tenure as revenue minister, the collection of stamps and registration, which is the third-most important tax after sales tax and VAT, has been increased.
The revenue department’s data for 2010, 2011 and 2012 shows that of the total tax collected by the stamps and registration department, as high as 65 per cent alone comes from registration of immovable properties.
The government had not revised RR rates in 2008-09 following the slow down in 2008. During 2008-09, the income from stamp duty was Rs 8,384 crore which was increased to Rs 10,901 crore in 2009-10 (30 per cent rise), Rs 13,411 crore in 2010-11 (23 per cent increase) and Rs 14,800 crore in 2011-12 (10 per cent). The tax collection is expected to cross Rs 15,000 crore by the end of 2012-13.
However, realty players have criticised the state government’s move, saying it would adversely impact the sector.
“The hike in RR rates during a sluggish market when there have been no major transactions is totally unwarranted. Real estate development will be badly impacted as premiums such as staircase exemption, fungible floor space index (FSI), open space deficiency and development charges payable to the Mumbai civic body will be telescopically increased as the rates of premium are derived from RR rates,” said Yomesh Rao, Director, YMS Consultants.
Paras Gundecha, President, MCHI-CREDAI expressed surprise over the revision in RR rates when there has been no rise in other costs. “RR revision has come at a time when the realty sector is struggling to survive during the current meltdown. It won’t be possible to achieve the government’s much- debated programme of affordable housing in such a high RR rate regime," he said.
Anand Gupta, Honorary General Secretary of the Builders’ Association of India alleged that the state government was falsely blaming developers while revising RR rates to earn more revenue for itself by applying artificial methodology. “The property transactions will certainly become dearer in the state,” he noted.