India is globally one of the preferred industrial destinations worldwide. It is one of the densely populated countries with limited land availability. To facilitate the government in executing social and common welfare schemes and prevent land hoarding Urban Land Ceiling Act (ULC) was introduced and came in force in 1976. In the act a ceiling limit (holding of a vacant area) was fixed. Many state and union territories adopted the act. Maharashtra was one such state. The ceiling limit was 500 Sq.Mtrs. But due to some reasons, the act wasn’t a success so it got repelled in 2007.
Maharashtra an epicenter of industrialization and MIDC a nodal agency grants Industrial Land on Leasehold basis for a period of 95 years. There are set development norms and stipulated time period. Sometimes development of plot is not possible in the set time frame. The land holders used to take ULC exemption for the Industrial Plots which gave them flexibility to hold a vacant plot more than the ceiling limit and the government used to provide them phase wise developments plans. But it was observed many of the plot holders didn’t abide the development plans and the plots remained partly developed/ vacant and unutilized.
Due to some technical or financial challenges when the plot holders want to transfer the leasehold rights, MIDC charges transfer premium. In case if the plot has been granted ULC exemption there is an additional fees that needs to be paid. Following Resolution was passed on 3rd Feb 2018 by Government of Maharashtra on applicability of Transfer Charges on ULC Exempted Industrial plot in Maharashtra .
- In addition to 10 % differential premium, 15% of the prevailing ready reckoner rate of the area shall be charged as transfer fee.
- 15 % receivable will be divided in the ratio of 60:40 between Government (60%) and MIDC (40%)
Because of the above GR the transfer charges were exuberant and plots with ULC exemption where not viable for transfer. Considering the challenges a revised GR was passed on 30th June 2021. The salient features of the GR are;
- Any ULC exempted plot if transferred for Industrial Use, ULC charges would not be applicable. The plot can be transferred by paying differential premium @ 10 %.
- Any ULC exempted plot if transferred for Commercial and Residential use. ULC will be charges @ 15% of the ready reckoner rate. Out of the recovery amount 60% amount will be deposited with the government and 40% amount will be deposited with MIDC. The entry ‘Area under industrial exemption as per section 20 of Urban Land (Ceiling and Regulation) Act, 1976’ which is recorded in other rights column for such lands will be removed and the land will be developed as per the terms & conditions of MIDC and the provisions of DC rules.
The above article is the translated version of MIDC circular number C83301/2021
ASCC Pvt .Ltd is into Industrial Consultancy Sector since 2004. Our services cover Industrial Real Estate Broking, Industrial Compliances. We can assist you in Buy/Sell/Lease/Hire Industrial Real Estate and getting/renewal of all permission and licenses for running an Industrial Activity . You can reach us on:
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406 Raheja Arcade, Sector-11, CBD Belapur,
Navi Mumbai – 400614, MH – India.