Circular 56849/C2/2018, Levying of Stamp Duty and Registration Fee for Properties in Special Economic Zones

What the circular governs

Circular number 56849/C2/2018 dated 26 December 2018 guides registering officers on stamp duty and registration fee concessions for documents concerning property in a Special Economic Zone. It explains how the concessions under G.O. Ms. No. 96, Commercial Taxes Department, dated 20 May 2004 and the Special Economic Zones Act, 2005 apply after the insertion of Rule 11A in the Special Economic Zone Rules, 2006.

The guidance affects developers, co-developers, units and parties presenting documents involving land, buildings or other property in a Special Economic Zone in Tamil Nadu.

Scope of the concessions

Circular number 56849/C2/2018 distinguishes between stamp duty remission under the Special Economic Zones Act, 2005 and the concession under G.O. Ms. No. 96.

Key points are:

• G.O. Ms. No. 96 grants stamp duty and registration fee remission for land transactions in favour of industrial units and their expansions in Special Economic Zones in Tamil Nadu notified by the Government of India.
• The concession under G.O. Ms. No. 96 does not apply when the transaction includes both land and a building.
• Under the Special Economic Zones Act, 2005, stamp duty remission may cover an instrument comprising land, a building, or both, when it is executed by, on behalf of, or in favour of a developer or unit, or is connected with carrying out Special Economic Zone purposes.
• Registration fee remission under G.O. Ms. No. 96 remains limited to instruments relating only to land. It is not available for instruments including property such as buildings or machinery.
• The term developer includes a co-developer.

Processing and non-processing areas

Circular number 56849/C2/2018 requires every document seeking a concession to state whether the property is in a processing area or a non-processing area. If this information is missing, the registering officer must not allow the stamp duty or registration fee concession.

For property in a processing area, the applicable concessions may be allowed subject to the stated conditions.

For property in a non-processing area, the party must produce a certificate from the concerned Special Economic Zone Development Commissioner. The certificate must confirm that the area is for social or commercial infrastructure and other facilities used only by Special Economic Zone entities. It must also state the village name, survey number and survey number-wise extent, and must be enclosed as part of the document. Without that certificate, the concession cannot be allowed.