varun

Select industries, including sugar, food processing and leather tanning, may get stamp duty exemption for buying industrial land. Properties bought in industrial areas by these sectors may now get stamp duty waiver in certain states. States like Chhattisgarh, Jharkhand, Orissa, Himachal Pradesh and Uttaranchal are likely to scrap stamp duty for 7-10 years in industrial areas by February, state government officials said. Bihar chief minister Nitish Kumar has already notified the policy in the state. The policy move in these states is in tandem with the directives of the urban development ministry. The provision for acquisition of land without stamp duty will be applicable only for select industries.

The move would result in a major cost cutting for those who are setting up such facilities in these states. For example, land for industrial use is available in Uttaranchal for about Rs 7 lakh per acre. A mid size unit may need around 20 acre for development. At present, the state charges 12% stamp duty, which implies a total cost of around Rs 1.56 crore for the company. Once the stamp duty is scrapped, it would entail a flat saving of Rs 16 lakh for the company. This is another move aimed at providing a comprehensive framework to enable an investor-friendly environment for ensuring industrial development, especially in states that haven't been able to ride on the boom yet. "It is also aimed at generating additional employment opportunities and to bring about a significant increase in the domestic product and eventual widening of resource base in states," a Bihar government official said. Once the policy becomes effective, it will be the first instance wherein stamp duty will vary depending on the sector. "The needs of the industrial sector are different from that of residential or even commercial sectors. In this case, a large amount of spare land also needs to be purchased. Time-bound scrapping of stamp duty will encourage companies to set up industrial units in these states," a Madhya Pradesh government official said.