No Compulsion to Pay Full Stamp Duty on Gujarat Jantri Rates
The Gujarat High Court (HC) gave an important judgement a few days back that registration of property cannot be made mandatory only on payment of the complete stamp duty according to Jantri rates. As per the ruling, paying 5% stamp duty on ready reckoner prices will no longer be a deterrent for registering a property.
Jantri rates
Jantri is a government document that specifies the market rates of land and construction. Hence, any stamp duty paid on land and property dealings will be paid according to the Jantri rates. Any taxes and revenues at the state or central level are also calculated according to these Jantri rates. In this document, the different land rates are decided by the state government’s revenue department, depending on the location.
Gujarat Jantri Rates
Earlier in May 2007, the government had issued a circular and amendment to the Registration Act’s rule 45(1). Accordingly, it had directed all the sub-registrars to register property related documents only if the buyer/seller agrees to pay full stamp duty as per the prevailing Jantri rates only. This meant that registration would not be possible if the transaction was made below the Jantri rates.
Before this new amendment, people could register the property by paying stamp duty on the contracted value. After the registration was complete, the deputy collector of stamp duty would perform a site inspection and decide the property value. If there was a difference found, property buyers could contest their cases.
The Gujarat government also came up with new Jantri rates in 2011. The new rates, while being welcomed by bureaucrats as a scientific and smart move, also led to confusion and opposition. Sceptics said that the new land prices pushed up the land prices. As such, developers and consumers in several areas, especially urban areas were unhappy.
Court Judgement
The Gujarat HC restored the system that prevailed before the 2007 amendment. The judgement said that the 2007 amendment was a violation of provisions under Registration Act and Bombay Stamp Act. The amendments would render provisions of section 32A of the Registration Act redundant. An aggrieved person would not be able to raise a dispute as the stamp duty amount was fixed according to Jantri rates.
Due to the revised jantri rates by the state government, the stamp duty would have been increased, removing the stamp duty relief property owners had. However, with the court order restoring the system that prevailed before 2007, property buyers/sellers will not have to pay a higher stamp duty on their property.
