39% decline in stamp duty revenue from Mumbai

MAHARASHTRA

A MONTH into the withdrawal of high-value currency notes, revenue from stamp duty slid to Rs1,305 crore in November in Maharashtra, compared to the monthly average Rs 1,643 crore prior to November 8, when the government announced the decision to scrap the notes.

While there was pick up from November 17, there were bigger dips in collections between November 20 and November 28. Last year, the government netted Rs 1,464 crore from stamp duty in terms of revenue in November, but it was also a slow month in a period marked by a slump, said officials. In August, revenue from stamp was much higher at Rs 1,748 crore, dropping to Rs 1,608 crore in September and then picking up in October at Rs 1,908 crore thanks to sales in the festive season of Diwali.

The decline has been very pronounced in Mumbai — one of the top realty markets in the country — at 39 per cent for registration of properties compared to 29.9 per cent across the state in eight registration circles. Against a daily average of Rs 20 crore in stamp duty collections between April 1 and November 8, India’s financial capital could report just Rs 12 crore in daily collections after demonetisation, according to officials.

The Department of Registration and Stamps, Maharashtra, is now adopting a “wait and watch” policy” preferring to wait for the figures for December before making a full assessment on the impact of demonetisation on real estate in Maharashtra. Real estate agents expect more sales in December. However, the department is still unsure if it will achieve the target of Rs 23,548 crore from stamp duty for fiscal 2016-17 after the government’s decision to scrap high value currency notes of Rs 500 and Rs 1,000.

Prior to November 8, the average documents registered daily was 7,721. But going by the latest data, in November, a daily average of 4,583 documents were registered hardly an encouraging sign considering that sales had just started recovering after a slowdown. With the number of registrations continuing to be 36 per cent lower than the daily average - clearly, it will take time for a reversal of the trend.

“Our daily online payment for stamp duty though is improving. We are recovering Rs 55 crore daily. Earlier, it was Rs 58.3 crore till November 8. It is hardly six per cent less than regular. But we will have to wait for some more time as we receive bulk payments from the Bombay Stock Exchange too and that could change the figures,” said N Ramaswamy, Inspector General of Registration (IGR) and Controller of Stamps.

“For share transactions we get stamp duty from the Bombay Stock Exchange which is around Rs 400 crore annually so that bulk payment sometimes comes. This month it came on November 28,” said Ramaswamy. In 2015, the final collections at Rs 21,767 crore exceeded the target of Rs 21,000 crore. The decline has been very pronounced in Mumbai — one of the top realty markets in the country — at 39 per cent, from registration of properties, compared to 29.9 per cent across the state in eight registration circles. Against a daily average of Rs 20 crore in stamp duty collections between April 1 and November 8, the capital city could manage a meager Rs 12 crore in daily collections post demonetisation, according to officials. the average documents registered daily before Nov 8. In Nov, a daily average of 4,583 documents were registered