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Stamp duty could push up land costs
Section Investment Pune Posted on Sun Jan 14, 2007 at 08:07:02 AM EST
(The Economic Times (India) Via Thomson Dialog NewsEdge) : A move to make SEZ promoters pay stamp duty at market rates could significantly push up the costs of land acquisition as the developer would have to pay a maximum of 5% on the value of the deal.This development is in line with the dominant view inside the Congress that the government's SEZ policy should not be seen as anti-farmer, especially after party president Sonia Gandhi made it clear that agriculture land ought not to be used for these zones.
A powerful group within the state cabinet, which is opposing the duty exemption, insists the issue be taken back to the state cabinet for approval. This could mean a further delay in land acquisition by several private developers. Several other companies are also planning big ticket SEZ projects in the state. These include Bajaj Auto (Aurangabad), Bharat Forge, (Pune), Videocon (Pune and Aurangabad), Shahpoorji Pallonji (Nagpur), India Bulls (Raigad), Wipro (Pune), Syntel International (Pune), K Raheja Universal (Navi Mumbai), Hiranandani Builders (Powai), City Parks (Pune).
If developers choose to register their land deeds at this point of time, they would have to pay stamp duty, according to Om Prakash Gupta, Controller of Stamps, Maharashtra. But most developers would prefer to wait for enabling provision in the state SEZ Act.
Around 65 odd proposals have already been cleared by the Vilasrao Deshmukh government. If these projects eventually materialise, this could push Maharashtra to the top of the heap in terms of the quantum of land to be developed as SEZs.
Of these, nearly 18 SEZs will be developed by the Maharashtra Industries Development Corporation(MIDC) and the remaining by private developers. The MIDC is exempt from paying stamp duty on purchase of land since it is a government entity. This is true for Cidco as well. Apart from the waiver to developers, a unit holder of a SEZ also enjoyed stamp duty exemption. This exemption, granted since May '02, covered agreements relating to deposit of title deed, conveyance among others. All instruments executed by any person to start an industrial unit or expand a unit in an SEZ were exempt from stamp duty. March 31, '06 was the deadline for this exemption as well.
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