WITH THE differing stands of the Centre and the State Government on stamp duty, the issue is set to snowball into a major controversy between the two.
The Centre is for reducing the duty and the State Government has decided in principle to maintain the existing duty. The Union Government is advocating reducing stamp duty from the present 10 per cent to 5 per cent in seven years, the State Government is not ready to reduce duty as it will mean a dent in state revenue from stamp duty on registry of properties. Besides, it will make property transactions cheaper.
The State Government contends that any reduction in present duty structure will result in loss of Rs 4,700 crore to the state exchequer in seven years (including current year). After reports that the Centre has made it mandatory for the State Government to reduce stamp duty to avail funds under the JNNRUM, the State Government swung into action and decided not to curtail stamp duty.
Principal Secretary, Commercial Tax, G P Singhal also made a presentation before the Government stating that reduction in duty would deprive the State of chance to earn Rs 4,700 crore in next seven years. Keeping in view quantum of the revenue loss, the State has decided to oppose the issue.
Talking to the Hindustan Times, Principal Secretary said the State Government would take up the matter at the proposed meeting of Standing Committee on State Taxation.
The meeting is scheduled for January next month and the State is all set to explain its stand on the issue. He expressed the hope that the high-power committee would certainly look into the issues being raised by the State Government.
Singhal said the State Government would resist the move because when discussions were carried out with the 12th Finance Commission, the State Government was not aware of the pre-condition of reducing the stamp duty.
“If the issue was raised that time, the State would have got necessary grant for the expected revenue loss due to SD reduction,” he reasoned.
At a time when the State is getting resources on the basis of returns projected at the time of discussions, it is unwise to reduce duty, he reasoned.