A recent circular to lift the stay granted on maximum registration fees of Rs.30000 and make it one per cent of market value without any maximum limit.
As per section 17 of the Indian Registration Act, 1908 any documents related to immovable property exceeding worth Rs.100/- needs to be compulsorily registered. This being a central Act it is being implemented by the state government as per the special power given to the state government. Further, the state government is also empowered to levy the registration fees by issuing necessary notifications. The registration fees is charged as a service charge and not as a part of taxes to increase the revenue. In the initial years, the maximum registration fees was Rs.100 and slowly the same was increased to 1% of market value of the property or Rs.5000/-, whichever is less. Normally once in five or six years the maximum amount used to be increased to Rs.10,000, then 20,000 and the latest maximum amount is Rs.30,000.
The revenue department in late 2008 issued a notification to remove the maximum limit of Rs.30,000 on registration fees and fixed at 1% of the market value. Considering the hue and cry of people, just before the Lok Sabha election to gain the confidence of the people, the above notification was stayed.
It is unfortunate that immediately after taking charge as Revenue Minister in the latest Assembly election, Hon. Revenue Minister Narayan Rane has given the approval for lifting the stay granted by the earlier Minister on levy of registration fees on all documents at the rate of 1% of market value.
According to a government press release, this will increase the revenue of the government by Rs.250 crores. The government, just before the election, stayed the order of increase in registration fees. The public at large voted for the government, thinking the government would continue with the policy for the welfare of the common man. When the Central and state government is talking about reducing stamp duty and registration fees and making flats at affordable rates, it is a great injustice to the people of Maharashtra.
This increase will lead to increase in payment of registration fees for all the types of documents like registration fees on flat purchase agreement, conveyance deed, various purchase documents, mortgage deed etc. Earlier there was a maximum amount of registration fees of Rs.30,000. In citiies like Mumbai, if a person is purchasing a flat worth Rs.50,00,000/-, he has to pay registration fees of Rs.50,000/- and for one crore, this would be Rs.1,00,000 as against Rs.30,000 charged earlier.
Registration fees are charged as service charges for preserving the documents by the government and not as a revenue collection measure. The government always keeps the social approach and can never think of making revenue by providing services. It is unfortunate that the present government wants to make an extra profit of Rs.250 crores on account of registration fees. In case the government thinks that there will be extra burden on it, the same should be given to the certain institutions like UTI services or NSDL, who are already providing services to the Income tax department for PAN card or TDS and other related services. This service also can be outsourced to other agencies to whom the government should give only approval. There are many types of taxes like stamp duty, execise, sale tax, MVAT, Professional TAx. etc. The registration fees increase should not be treated as a revenue collection measure. Maharashtra Societies Welfare Association, certainly will file a writ petition in the HIgh Court against such government polices, if the same is not withdrawn immediately. It is a great injustice to the people and also not keeping the promise made during the election.
This increase in registration fees will affect even the registration of conveyance deed, mortgage deed, hypothecation documents and many other documents which is being registered.
The other changes made is about the levy of stamp duty on share and security transactions.