The Tamilnadu Government have reduced the Guide Line Value (GLV) of the Land by 33% from the existing value and increased the fee for registration from 1% to 3 %. Though the reduction in GLV will reduce the stamp duty cost, this will however increase the cost of the flat sold by builders as explained in the below mentioned table. In Tamilnadu the agreement for flat construction to be registered before executing the sale deed for the undivided share of land. The stamp duty and fee for the same is fixed at 1% plus 1% and hence the total cost of registration of agreement is 2%. Under compounding method builder need to pay VAT @ 2% on the value of flat as per the agreement and another 6% to be paid (15% X 40%) by way of service tax. The reduction in the GLV of land will increase the value of the flat. Considering this the below mentioned table is prepared.
|Particulars||Rate||Old GLV with Old Rates||Revised GLV with New Rates||Old GLV with New Rates|
|Total Value of the Flat||1,00,00,000||1,00,00,000||1,00,00,000|
|Land Value – GLV||25,00,000||16,50,000||25,00,000|
|Vat under compounding method||2%||1,50,000||1,67,000||1,50,000|
|Service Tax under compounding method||6%||4,50,000||5,01,000||4,50,000|
|Registration Cost to the Land|
|Regn Cost to the Agreement||2%||1,50,000||1,67,000||1,50,000|
|Total Cost to the Govt||9,50,000||10,16,500||10,25,000|
|Increase in overall cost to the government||66,500||75,000|
|Increase in overall cost to the government if the old value is taken as land cost||8,500|
From the above table it is evident that the overall cost of the flat in the hands of the purchaser is going up.