COSIA Meets Industries Minister: Briefs on the effects of “Ready Rackoner Rates” on Industries in MIDC area.

COSIA Chairman Mayank Shukla along with its Core Committee Member CA Julfesh Shah, met Industries Minister of Maharashtra Subhash Desai, to apprise him on ill effects of imposing “Ready Reckoner Rates” on industries, situated in various MIDC areas in the state & submitted the memorandum of the same.The memorandum stated that all these rates of property are usually implemented in the areas where there are no prescribed rates to calculate tax on property, or calculate income on sale of property or transfer the long term “Lease Hold Rights” or to levy stamp  duty in case of commercial transactions of immovable property.  These rates are fixed on earlier commercial transactions of property that has taken place in similar location.  This “Ready Reckoner Rates” are taken as base to calculate the property tax for local body including Gram Panchayats. It is also taken as based to calculate “Stamp Duty”, and also as base on evaluating Direct Tax by Revenue Department (Income Tax).Now MIDC offers its land for lease specifically for industrial use only and thus rates of allotment for lease is also much less than the Ready Reckoner Rates.  Therefore taking “Ready Reckoner Rates” as base in MIDC areas in totally illogical and has its ill effect on the Industrial Development in the state, the memorandum stated.

CA Julfesh Shah further elaborated that the adverse effect of this implementation is  :- (i) Inflated stamp Duty (ii) Inflated Capital Gain Tax and (iii) Inflated levy of property tax by local bodies, which discourage the commercial transaction of property meant for only industrial use in MIDC area. Thereby under utilization of precious land, allocated for industrial activity, resulting in shortage of land particularly where there is a scarcity  of land and thus hindering industrial development of that area.The Hon’ble Industries Minister gave a patient hearing to these issues and assured COSIA to take this matter with appropriate authorities and convene a meeting with Industries Associations to do the needful in this important matter.