CREDAI-Pune Metro Opposes Government’s Proposal To Levy 1% Metro Cess
Pune, 8th March 2022: As there is a possibility of reintroduction of an additional 1% Metro cess on all property purchases in Pune, Mumbai, Thane and Nagpur from April 1 this year, CREDAI- Pune metro along with its other chapters has strongly opposed the proposal and has appealed the government to reconsider its decision.
This cess will be for funding the Metro rail projects and transport-related projects in the state and is expected to augment revenues of the Metro rail services.
The Maharashtra government had earlier imposed 1% stamp duty in the name of metro cess in all cities where the Metro work is under construction since 2017. It was, however waived off by the government for two years due to COVID pandemic but as per the latest instruction from the government, it may be re-implemented again from April 1, 2022.
Speaking on the issue, Anil Pharande, President, CREDAI-Pune Metro said, “The already existing 1% Local Body cess and the additional Metro cess of 1% will mean direct increase in purchase price of properties by a lakh to few lakhs, which accordingly will impact the consumers who are looking to buy their dream homes. The after effects of COVID have not yet been eliminated and the industry, which is the 2nd largest employer and contributes to more than 5-7% of the GDP may not be able to rise again from the shock of this price rise.”
As the cess will increase the stamp duty in urban areas on property registration from 6% to 7% in Pune, CREDAI- Pune Metro has claimed that such revision will have an adverse impact on the home buyers and the real estate industry, which has been affected badly due to the pandemic and is yet to revive completely.
The Association has already submitted a letter of appeal to Maharashtra Revenue Minister, Balasaheb Thorat over the same and has suggested that the charging of metro cess may be implemented after full functioning of all the metro lines and should be charged at a reduced rate.
“The industry is already facing problems due to the steep rise in raw material prices, which has already raised input costs by 300-400/- per sq ft. Also the cost of crude oil prices has gone up and is likely to go up further substantially, due to the on-going Russia-Ukraine war. In construction, the transport cost accounts for about 15-20 %, which will also have an adverse impact on the input costs and developers will have no option but to hike the prices to sustain,” said Pharande.
Citing recent examples wherein the stamp duty concessions were introduced by the state government earlier, CREDAI-Pune Metro has said that it had helped improve the revenue of the govt. treasury as Pune recorded 252% of pre-COVID sales and also saw an improvement by130% on a year-on-year basis in 2021. According to data, in December 2019, a total of 2,39,292 registrations generated a revenue of ₹2,712 crore. In December 2020, the figure increased to 4,59,607 and the revenue earned was ₹4,314 crore; a 92% rise in registration and 59% growth in revenue compared with 2019.
