The state has earned Rs 3,597 crore in revenue from Metro cess—an additional 1% stamp duty on registration of properties—since it was introduced in February 2019 in Mumbai Pune, Thane and Nagpur to fund public infrastructure projects like metros, flyovers and bridges.In March 2020, the cess was discontinued owing to widespread financial distress on account of the Covid-19 pandemic and reintroduced in April 2022.It is collected through stamp duty registration of documents for sale, gift and mortgage of properties. In Mumbai, the duty was raised from 5% to 6%, and in the other cities, it was raised from 6% to 7%. The 1% increase in stamp duty meant an additional burden of approximately Rs 50,000 on property buyers.
The Mumbai Suburban district has recorded the highest collection of Metro cess of Rs 1,167 crore for 98,034 registered documents.
Pune city has recorded the highest number of property documents (1.8 lakh) and received Rs 1,150 in Metro cess.
Pankaj Kapoor, founder and managing director, Liases Foras, a real estate research agency, said sale of property has picked up post-pandemic and it has been continuously growing.
“The current quarter, and for at least two more quarters, it looks good. The chances of withdrawal of the cess is likely only if sales decline. Despite the increase in interest rate, hike in property prices, the real estate industry is in a productive range. As long as the market is able to absorb the prices, there is no reason for withdrawal of the cess,” he said.
Sunit Gupta, an expert on property valuation, pointed out that the Goods and Services Tax replaced octroi in Mumbai. The city, he said, has only one cess which is the Metro cess. However, outside Mumbai, people pay two types of cess — the Metro cess and the Local Body Tax (LBT) cess.
“Mumbai pays 6% in stamp duty and in other cities the stamp duty charged is 7% when LBT too has been replaced with GST. The government is silent on it and there are no protests from people. Several metro projects are being executed and the cost of infrastructure is high. On the positive side, builders are reporting good sales and projects are being revived. Money is rolling in, and so long as it continues, the cess will continue,” he said.
Earlier, developers’ bodies had approached the state government to reconsider implementation of Metro cess, fearing the additional stamp duty would slow down bookings. Many believed the increased cost could hit revenue collections in highest revenue generating cities such as Pune, Nagpur and Mumbai.
