‘Metro cess unfair, will impact property buyers’

Let commuters incur expenses, why should ordinary flat buyers be penalised with cess, ask consumer bodies and real estate experts

Consumer bodies and real estate experts have demanded scrapping of the 1 per cent metro cess that will be imposed by the state government from April 1. Real estate experts have said that consumers are already overburdened after two years of the pandemic and subsequent lockdown, which resulted in business and job losses and pay cuts. 

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“We had expressed our displeasure even earlier [a few years ago] when the government had announced levying of the 1 per cent metro cess. After numerous representations by various consumer forums, the government had agreed to our point of contention. Accordingly, the government was compelled to put the proposal on hold temporarily,” said Ramesh Prabhu, founder chairman of Maharashtra Societies Welfare Association (MahaSEWA).

'Will write to CM'

“We will soon be writing to the chief minister on behalf of the public and will be making our submission to completely withdraw or permanently ban levying of metro cess in Mumbai, Nagpur, Pune, Nashik and other cities where metro services are already operational or will be operational soon,” said Prabhu.

“Realty prices in Mumbai are set to rise with the state government planning to impose metro cess from April 1. Due to the pandemic, many people have lost their jobs, and the realty sector, which had suffered enormous losses due to the pile-up of inventory, was looking for some respite from the state government,” said Advocate Godfrey Pimenta, of WatchDog Foundation, who has now written a letter to the chief minister, requesting that the levying of metro cess be reconsidered.

Realty sector seeks relief

“Recently, BMC too allowed a 50 per cent reduction in development charges with the condition that developers bear the stamp duty burden for flats sold. The decision to impose an additional 1 per cent cess will make flat purchasers leave Mumbai, as the flat rates running into crores are beyond the reach of ordinary Mumbaikars anyway. How will the Central Government's vision of shelter for all by 2022 be achieved if more and more burden of stamp duty is being imposed?" asked Pimenta. 

"The realty sector which has suffered the most is seeking some sops but the state government does not care. When the state wanted additional revenue, it lowered the stamp duty but when ordinary Mumbaikars need some relief the state government is turning a Nelson's Eye,” said Pimenta.

Prevent burden on home buyers

“For instance, if a flat costs Rs 1 crore, the stamp duty as of date is approximately 5 per cent of the value and the out-of-pocket expenses towards the said flat will be Rs 1.05 crore. With the additional 1 per cent of metro cess being levied, the overhead expenses of the property by default goes up by another R1 lakh [s R5 lakh towards stamp duty and R1 lakh towards metro cess],” said Adv Anil D'Souza, Secretary of the Bar Association MAHA-RERA.

“Considering the COVID assault on the economy and the 12 months of self-imposed economic embargo, the government should reach out with sops for taxpayers and prevent this additional burden on home buyers. When there is such a huge stock-piling of inventory across the MMR, why will someone purchase a flat that has suddenly become more expensive?" asked D’souza.

Builders will be affected, too

“Myriad court cases are piling up in MahaRERA and consumer courts over the flats not delivered to bona fide allottees on time. Some projects like Blue Diamond, Goregaon Sai Pearl, etc, are delayed by decades and the litigants continue to fight their long legal battles in courts. If the vision for affordable housing for all is to be achieved, the middle-class taxpayer must be rewarded for his diligence and not burdened by additional taxes,” D’souza said.

Expert view

Advocate Vinod Sampat, Founder and President, Flat Users Residents Welfare Association, said, “We all know the double standards of government. In the puranas, it was advised to collect taxes like a bee that collects nectar from the flower without affecting the fragrance of the flower. But these days the taxes are collected like the sting of the bee. In all probability, the government is going to collect 1 per cent of metro cess from the new flat buyers. If a person is travelling by metro, let him incur the expenses. Why should ordinary flat buyers be penalised with such taxes?.”

“The stand of the government of collecting metro cess is nothing but abuse of power by politicians. Just because flat purchasers are helpless, they are forced to pay the money. There is a move even to increase the stamp duty. Our association is also writing to the government to stop the draconian increase in taxes,” said Sampat.

April 1
Date from which the metro cess will be levied

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