Tamil Nadu Government Gazette Extraordinary No. 114
The Government of Tamil Nadu published Tamil Nadu Government Gazette Extraordinary No. 114 on May 3, 2012, presenting five amendment Bills concerning value added tax, stamp duty and registration. The Bills were introduced under the portfolio of the Minister for Commercial Taxes and Registration, Law, Courts and Prisons, and the Gazette does not identify a separate issuing department or give a Government Order number. For property transactions, the principal proposals concern stamp duty on building construction agreements and the removal of maximum stamp duty limits for certain family instruments.
Legal status and scope
Tamil Nadu Government Gazette Extraordinary No. 114 publishes Bills introduced in the Tamil Nadu Legislative Assembly on May 3, 2012, together with their statements of objects and reasons. The Gazette lists two Tamil Nadu Value Added Tax amendment Bills, two Indian Stamp amendment Bills and one Registration amendment Bill.
Each Bill states that it will commence on a date appointed by the State Government through notification. The supplied text does not provide those commencement dates and does not establish that the proposals had already taken effect.
Changes relevant to property transactions
The Indian Stamp (Tamil Nadu Amendment) Bill, 2012 proposes:
- Stamp duty of one rupee for every hundred rupees, or part of that amount, on an agreement relating to building construction. The duty is calculated on the proposed construction cost, construction value or consideration stated in the agreement, whichever is higher.
- A definition of building that includes residential, commercial, institutional, industrial and other units proposed to be constructed on an undivided share of land.
- Removal of the stated maximum stamp duty limits for specified instruments involving partition, dissolution of partnership, release and settlement among family members.
The stated purpose is to cover construction agreements between flat buyers and developers where the buyer separately acquires an undivided share of land. The statement of objects and reasons also says a separate amendment to the Registration Act, 1908 was intended to make registration of such construction agreements compulsory. Although a Registration (Tamil Nadu Amendment) Bill, 2012 is listed, its detailed provisions are not included in the supplied text.
Other proposals in the Gazette
The Tamil Nadu Value Added Tax (Third Amendment) Bill, 2012 would require a registered dealer with annual total turnover exceeding one crore rupees to obtain an audit by a chartered accountant or cost accountant and submit the report to the assessing authority. Failure could attract a penalty of ten thousand rupees after an opportunity to be heard, in addition to tax payable.
The Tamil Nadu Value Added Tax (Fourth Amendment) Bill, 2012 changes entries concerning aviation turbine fuel and another scheduled item. The Indian Stamp (Tamil Nadu Second Amendment) Bill, 2012 proposes expanding the meaning of conveyance to include specified court and Reserve Bank of India orders involving company amalgamation or reconstruction and transfers of property interests.
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Common questions
Does the Gazette itself prove that the new stamp duty rules were in force on May 3, 2012?
No. The text publishes Bills introduced in the Legislative Assembly, and each Bill says it will commence on a date later appointed by State Government notification.
Would the proposed stamp duty apply to a flat construction agreement on an undivided share of land?
Yes. The Indian Stamp (Tamil Nadu Amendment) Bill, 2012 expressly includes construction of a residential or other unit on an undivided share of land.
How would stamp duty on a construction agreement be calculated under the proposal?
It would be one rupee for every hundred rupees, or part of that amount, based on the proposed construction cost, construction value or stated consideration, whichever is higher.
Does the supplied text make registration of construction agreements compulsory?
The statement of objects and reasons says a separate Registration Act amendment was proposed to make such registration compulsory. The detailed provisions of that Registration amendment Bill are not included in the supplied text.
