CIDCO LEVYING TRANSFER PREMIUM WRONG: HOUSING FEDERATION

The Maharashtra State Housing Federation’s Navi Mumbai wing states that CIDCO should stop levying transfer premiums on flats/commercial outlets on resale properties, as it is double taxing the property buyer. CIDCO has entered into a lease agreement of 60 years with most housing societies in Navi Mumbai as a town planner for decongesting Mumbai. A flat buyer already pays a transfer premium of Rs 25,000 to the cooperative housing society per the Maharashtra Cooperative Societies (MCS)  Act, 1960 and its bylaws. Still, CIDCO is levying a transfer premium per slab rate ranging from over Rs 23,000 to over Rs 8 lakh, excluding 18 per cent GST, which is legally and ethically wrong for CIDCO, claims the federation.

A writ petition is already filed in the Bombay High Court, challenging these dual transfer premium charges. The matter is slated for a hearing before the month-end. Advocate Shreeprasad Parab, expert director of the Maharashtra State Housing Society Limited, said, “CIDCO, acting as an agent of the state government, provides land to cooperative housing societies/developers only on a lease of 60 years in accordance with the land disposal regulations.

“CIDCO charges transfer premium from individuals who sell their flat/commercial outlet and transfer their membership in the society. The transfer premium charged by CIDCO ranges from Rs 23,000 plus 18 per cent GST for a flat with 215 sq ft carpet area to Rs 8,35,000 plus 18 per cent GST for flat/commercial outlets with carpet area above 2,150 sq ft,” said Parab.

According to Parab, the Supreme Court has held that an agreement to transfer shares of a cooperative housing society or a limited company cannot amount to an agreement to sell an immovable property. Although the flat purchaser has a right to occupy the flat as a member of society, the transfer of shares alone does not amount to the transfer of immovable property.