MCHI reiterates its demand for Stamp duty on carpet area

Mumbai, January 04, 2011: Maharashtra Chamber of Housing Industry (MCHI), the most prominent body of real estate developers today reiterated its demand to make the stamp duty chargeable on carpet area in order to bring transparency and uniformity in real estate transactions in the state.
In a letter addressed to the Maharashtra Revenue Minister Balasaheb Thorat, MCHI President Sunil Mantri exhorted the need for bringing transparency and uniform practice in the various systems to the Bombay Stamp Act 1958.
Recalling the anomaly in Development Control Regulations in order to follow Carpet Area norms in the sale of flats, the MCHI President reiterated for bringing uniformity in the stamp duty by charging the same as per the carpet area.
“Presently stamp authority is charging Stamp Duty on the basis of Carpet plus 20 per cent area, which brings about an anomaly in the government departments in a different way. It is the desire of the government of Maharashtra that the sale of flat be made mandatory on Carpet Area basis. On the other hand stamp duty is charged on Built Up Area basis, a different perspective is being created”, Mr. Mantri said.
The MCHI President urged the state revenue Minister to make the stamp duty chargeable on Carpet Area basis in Ready Reckoner which would be published in the month of December 2011, for the year 2012.
 “We are willing to adopt sale of Flats on Carpet Area basis which will enable us to implement the government’s stated intention. However, it is very essential with a view to bring uniform practice for sale of Flats on Carpet Area basis, by all the developers”, Mr. Mantri said adding that “For this purpose only minor modification in D C regulations is needed”.
“One authority permits projects on BUA, and on the other asks developers to sell flats on Carpet Area basis, is unjustified. Hence, we urge your good self to use your good offices to intervene in the matter and accord your approval for sanction of the Building Permission Plan and Stamp Duty on Carpet Area basis. This approval shall enable MCHI to direct all the developers under its umbrella to sell flats on Carpet Area basis”. Mr. Mantri said.
Historically, constructed property has been measured or traded in terms of the carpet area available to the buyer. Earlier, that is up to the mid 70s, property was being traded in Mumbai purely on the basis of carpet area, taken as being equal to the size of the carpet spread required when every inch of the floor inside the house was to be covered.
The concept of Built up / super built up area basically started as a result of the justification for the cost being incurred on the various add-ons by the developers such as podium, garden, and amenities like swimming pool and club house, which were not taken into the calculation till early 70s.
Meanwhile, in yet another letter addressed to the state revenue Minister Mr. Thorat, the MCHI President also exhorted the need for amendments in the Bombay Stamp Act, 1958.
“Our stamp duty system always looked upon as a bible for the rest of India. It is also equally important that various reforms are brought into practice in the system which will make every consumer comfortable and at the same time the exchequer is able to bring more transparency and uniformity”, Mr. Mantri opined.