GCCI urges Gujarat to cut stamp duty

AHMEDABAD: The Gujarat Chamber of Commerce and Industry (GCCI) has called for an across the board 50 per cent cut in electricity duty, sharp reduction in stamp duty rates, which currently vary from 8-14 per cent in addition to a complete abolition of octroi duty from areas under municipal corporations in the state.
In a pre-budget representation made to state finance minister Vajubhai Vala, GCCI president Shreyas Pandya pointed out that Gujarat continued to have the highest power tariffs among all states even though the state government had recently slashed electricity duty from 60 per cent to 45 per cent in the commercial category.
Expressing fears that power tariffs may be hiked further by the Gujarat Electricity Board, Pandya said the heavy burden of electricity duty was leading to a higher cost of production, rendering Gujarat-based trade and industry uncompetitive.
"Even the Gujarat State Electricity Regulatory Commission (GERC) in its award has suggested a duty cut to rationalise power tariffs," he argued.
Among other demands for the state budget for 2004-05 that is is scheduled to be presented on May 20, GCCI has called for a complete abolition of octroi duty from the remaining six municipal corporation areas in the state. "Though octroi abolition would amount to losses of around Rs 900 crore to the state, it would be more than compensated by the substantial hike in the tax and non-tax revenues."
According to GCCI, as against the projected tax income of Rs 18,744 crore for the year 2003-04, the state government had already raked in Rs 23,000 crore. Moreover, the sales tax income of the state has shot up 25 per cent in the past year from Rs 5940 crore in 2002-03 to Rs 7500 crore in 2003-04.
Demanding a reduction of stamp duty for housing sector to 4 per cent following the Centre’s decision to slash stamp duty by 50 per cent, GCCI has mooted a system akin to value-added tax that allows for a set-off when a property is transferred.
"When a number of income tax incentives are being given by the Central government to boost housing activities, the state should also follow the suit and fix the rate of stamp duty in such a way that it compensates the expenditure incurred on departmental activities. Stamp duty should not be subjected to source of income at the state level but only confined to registration of documents," the GCCI chief added.