Maharashtra govt waives Rs 250 cr stamp duty on airport project

The Maharashtra cabinet today agreed to forego its claim to a Rs 250 crore stamp duty on the Union government-sponsored airport modernisation project in Mumbai's two facilities.

Under Section 3 of the stamp duty Act, the state may exempt any transfer of land from the duty if it is made from one government authority to another.

Chief minister Vilasrao Deshmukh, however, told media persons that the loss owing to the exemption would only be notional in nature, as the modernisation programme will result in increased revenues to the state far more than the Rs 250 crore.

In the current instance the Airport Authority of India (AAI) would transfer its land to a special purpose vehicle owned by the Union government with 74 per cent of the SPV's equity to be subsequently transferred piecemeal to private entities.

The Union government has prepared a Rs 4,500 crore modernisation business plan for the Mumbai airport facilities, which will include the construction of a second parallel runway amongst other modernisation initiatives.

The modernisation plan would also result in increased revenues to the state government far more than the Rs 250 crore by virtue of the improved facilities attracting and having the capability to cope with increased air traffic of both passenger and cargo transport.

On an earlier occasion, the state cabinet had deferred the decision to grant the exemption of stamp duty for the SPV as it felt that private entities would benefit from this move. However, it was pointed out that the SPV would be formed and totally owned by the Union government.

Only subsequently, when individual modernisation initiatives would be undertaken would the 74 per cent equity divestment take place.