States seek pie in SEZs, moot 2% stamp duty

NEW DELHI: State governments are keen to capture a slice of the SEZ bonanza. The governments of Haryana, Maharashtra and West Bengal are in talks with the Centre to explore the possibility of introducing a stamp duty of around 2% on the non-processing areas within an SEZ.

This would require an amendment in the SEZ Act, which provides for anexemption from state taxes andlevies, besides Central taxes.

Non-processing areas constitute 50% of an SEZ, and includes townships, hospitals, schools, colleges and recreational centres. States think SEZs should also generate revenue for their coffers apart frombringing investment.

Haryana chief minister Bhupinder Singh Hooda told ET: “If implemented, this will obviously be a good move for the state. The nominal stamp duty of 2%, unlike normal stampduties of8%, will not be of that much burden for the private developers either.”

Reliance Industries (RIL) and DLF are among the companies making big-ticket investments inHaryana for developingSEZs. If the states have their way, thenew rule would be applied with prospective effect. Earlier, land deals would be ‘grandfathered’, ie they would not face stampduty.

Commerce ministry officials are of the view that the case for stamp duty has to be studied if some consensus is built among the states hosting SEZs. “Theremay be a need to amend the SEZ Act to this effect,” an official said.

At present, the SEZ Act exempts land bought for the purpose of SEZ fromany duty or tax. For instance, if the policy is implemented, RIL will have to shell out an additional Rs 20 crore in the land acquisition process for its Jhajjar SEZ.

The company is still to buy about 5,000 acres for the project, which will cost about Rs 1,000 crore.

On the other hand, DLF, will have to fork out more, as the company is yet to start its land acquisition process in the state.