The face-off between the Municipal Administration and Revenue Departments has impacted builders who say that they are forced to cough up 0.5 per cent of the prevailing stamp duty fee twice. The Stamps and Registration Department is insisting that the builders pay 0.5 per cent duty to register the mortgaged portion of the project/venture and an additional 0.5 per cent is being levied while releasing the mortgaged property, taking total fee to 1 per cent.
As a result, builders will have to pay not less than Rs. 75,000 to Rs. 1 lakh for an apartment of 20 to 25 flats, builders say. According to with the mortgage clause of building rules, it is mandatory for builders to give an undertaking through an affidavit relating to construction as per the sanctioned plan along with mortgage of 10 per cent space. The Stamps and Registration department has to record it in the prohibitory property watch register to ensure that the space is not sold or purchased by anyone. If a building violation occurs, the respective builder forfeits ownership of the space mortgaged and will be denied occupancy certificate while the mortgage space has to be demolished.
“However, the registration department is not maintaining the register on the pretext that the Central government should amend the Act,” says Y.V. Ramana Rao of Confederation of Real Estate Developers Associations of India (CREDAI). It is a waste of time and energies as the mortgage would be released only if the urban local body/Corporation designated employee accompanies to the Sub Registrar office, he says.
Capital Region Builders Association (CRBA) chairman Gadde Rajling says there was no coordination between Revenue and Municipal Administration. “Left hand doesn’t know what right hand does. It is nothing but arm twisting to collect stamp duty twice. Builders have been representing to the government ever since the GO 86 was issued. Hardly there is any response”, he says.
If a builder constructs an apartment of 20 to 25 flats, 3 flats are mortgaged as per the rules. The builder would have to pay Rs. 75,000 on an average, as stamp duty for registering the mortgaged portion if value of each flat was around Rs. 25 lakh. The builder has to bear these expenses, he explains.
(Reporting by
G.V.R. Subba Rao)
There is no coordination between Revenue and Municipal Administration. Left hand doesn’t know what right hand does. It is nothing but arm twisting to collect stamp duty twice.
Gadde Rajling,CRBA chairman
