The Hindu Business Line : FICCI for lower stamp duties on land deals

THE Federation of Indian Chambers of Commerce and Industry (FICCI) has asked the Government toreduce stamp duties on sale and purchase of land to 2-3 per cent of the value of the transaction.

The Chamber says that stamp duty differs from one State to another and is sometimes as high as 14-15 per cent.

In a paper submitted to the Ministry of Finance and the Ministry of Urban Development, as part of pre-budget memorandum, the Chamber also said that there should be a system of credit for all transactions after the first one for any piece of land. The Chamber says that, as it happens in value-added tax, the system would avoid the resultant cascading effect of stamp duty, thus reducing the cost of the property.

The Chamber has further asked the Government to remove Section 50C of the Finance Act 2002.

According to the Act, if a particular piece of land is sold or purchased at a price lower than that assessed by any authority of the Sate Government, the value assessed by the State Government authority would be deemed to be the actual value of the sale for the purpose of calculation of stamp duty.

The Chamber said that since there is no scientific method of deriving at the value by the State Governments, the Section should be removed from the Act.

The Chamber has also suggested redefining `infrastructure facility' for the purpose of providing exemptions from taxes in order give a fillip to the housing sector. At present, the Government provides tax exemption to the tune of 100 per cent for 10 consecutive years on profits derived from developing, maintaining or operating certain `infrastructure facilities.'

These infrastructure facilities include ports, roads, bridges, rail systems, highway projects, water supply projects, sanitation and sewerage systems, airports and inland waterways. But the Chamber says this definition does not provide necessary incentives for housing sector where township projects are involved.

Hence the Chamber wants the definition of `infrastructure facility' to be extended to include "an integrated township development involving provision of residential, educational, medical, community, commercial or institutional buildings and creation of required facilities including roads, water supply, water treatment, sanitation and sewerage systems, solid waste treatment and management systems, electrification, landscaping and afforestation and other civic services needed in an integrated township."

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