The boom in the real estate sector in Punjab has started reflecting in Punjab’s tax collection. The state has registered a 49 per cent increase in stamp duty and registration fee collection in the last financial year as compared to previous year. According to the state government data, stamp duty and registration fee collection has increased from Rs 1,562.2 crore in 2009-10 to Rs 2,327.7 crore in 2010-11.
Buoyed by the collection in the last financial year, the state government is expecting to garner Rs 2,900 crore from stamp duty and registration fee in the current financial year. According to revenue officials, this is because the state government has been able to put in place a very effective system of tax collection which also includes fixation of targets for the department. They also said that computerisation of land records is also one of the factors behind the increase in tax collection. It is worth mentioning that the state has come closer to total computerisation of land records with operationalisation of 105 of 156 Farad Kendras.
Although the state witnessed significant increase in tax collection in the last financial year, however it could not achieve the desired target in line with the Budget Estimates or Revised Estimates. According to the Budget Estimates, the state government was expecting Rs 2,395 crore and Rs 2,500 crore according to the Revised Estimates.
Although the state couldn’t achieve the Revised Estimates or Budget Estimates, there is much to cheer for the state government. Barring 2010-11, stamp duty and registration fee collection was not very encouraging during the last few years. According to a Comptroller and Auditor General (CAG) report, there was a decline in stamp duty and registration fee receipts from Rs 1,670.50 crore in 2005-06 to Rs 1,550.94 crore in 2009-10 and the collections were far below the Budget Estimates in 2009-10 by 23 per cent. Also, the percentage of receipts from stamp duty and registration fee to the total receipts in the state remained more or less stagnant at 10 per cent during the period 2005-10.
According to the CAG report, the actual receipts from stamp duty and registration fee during the period 2005-06 to 2009-10 have been on the decline.
The government in a statement in August 2010 said the main reasons for decrease in the revenue collections were the less number of registration deeds preferred by the public and the recession. However, according to the CAG report there were evasions of stamp duty and registration fee on sale of immovable property on powers of attorney and due to non-registration of agreements for sale.
Also, earlier, CAG in order to check evasion by masses has recommended that Stamp Duty Act /Rules be implemented, for preventing the misuse of power of attorney given for sale of immovable property, in line with provisions made by other states. It also recommended expediting computerisation of registration, linked with land record and deployment of staff, in accordance with the workload to ensure proper scrutiny of instruments at the time of registration, after a proper study on manpower planning.
