India’s rapid industrial growth has consistently faced the challenge of limited urban land availability. To regulate land holding and prevent hoarding, the Urban Land Ceiling (ULC) Act, 1976 was introduced and adopted by several states, including Maharashtra, where industrial development is largely facilitated through the Maharashtra Industrial Development Corporation (MIDC). Although the ULC Act was repealed in 2007, exemptions granted to industrial plots continue to have significant implications, particularly when such leasehold rights are transferred. Over time, MIDC and the State Government have issued multiple Government Resolutions prescribing transfer premiums and additional charges for ULC-exempted plots. This article outlines the salient features of the key Government Resolutions (GRs) issued from the year 2007 to 2025 governing ULC transfer charges in Maharashtra.
Government Resolution dated 23 November 2007
- Transfer charges on ULC exempted plots will be 100% of the prevailing ready reckoner rate in Mumbai, Thane, Pune, Ulhasnagar, Nagpur, and Nashik urban areas.
- Transfer charges on ULC exempted plots will be 50% of the prevailing ready reckoner rate in Kolhapur, Solapur, and Sangli urban areas.
Government Resolution dated 3 February 2018
- Transfer charges on ULC exempted plots will be 25% of the prevailing Ready Reckoner rate in all industrial areas.
- 60% of the transfer charges shall be remitted to the Government, while 40% shall be deposited with MIDC.
- If the land is transferred for industrial purposes on payment of 25% transfer charges and is subsequently transferred for a second time for industrial, residential or any other use, the transfer charges would be levied as per the prevailing policy.
Government Resolutions dated 23 June 2021
A. Transfer Charges for change of purpose, Transfer & redevelopment of ULC exempted Commercial Plot:
- 5% of the prevailing Ready Reckoner rate shall be levied on the entire exempted area if the commercial plot is redeveloped for commercial purpose, while the ULC status on the plot shall not be deleted.
- 20% of the prevailing Ready Reckoner rate shall be levied on the entire exempted area if the commercial plot is used for other purpose, while the ULC status on the plot shall be deleted.
B. Transfer Charges for change of purpose / Transfer of ULC exempted Industrial Plot:
- If ULC exempted industrial plot is transferred for industrial use no transfer charges is applicable and ULC status on the plot shall not be deleted.
- If ULC exempted industrial plot is used / transferred fornon-industrial use 15% of the prevailing Ready Reckoner rate shall be levied and ULC status on the plot shall be deleted.
- If such land is transferred or used for any non-industrial purpose, a 15% transfer premium (as per Ready Reckoner and GR dated 01.08.2019) shall be payable, after which the Section 20 exemption entry shall be deleted and development of the land may be carried out as per the terms and conditions of the Maharashtra Industrial Development Corporation and the applicable Development Control Regulations.
Government Resolution dated 15 March 2024
- If ULC exempted industrial plot is transferred for the same purpose before 23.06.2021, transfer charges and interest shall be charged as per the policy prevailing at the time of transfer.
- If ULC exempted industrial plot is transferred multiple times before 23.06.2021 and transfer charges were not recovered earlier, only the transfer charges for the last transfer, along with interest, shall be recovered.
- Vacant land mentioned in the ULC exemption order shall not be changed or recalculated unless there is court order.
- ULC status on the plot shall be deleted for the area for which transfer charges along with the interest is paid. For the balance area of the plot, ULC status shall remain.
- No ULC Transfer charges shall be applicable to the plot transferees for the same purpose, prior to 23.06.2021, arising out of merger, demerger, or transfer, where the promoter shareholding does not reduce by 51% or more.
MIDC Circular dated 2 January 2025
To ensure timely disposal of pending cases, authority to collect ULC transfer charges has been delegated to the concerned Jt. CEO of MIDC.
ASCC Analysis
The Urban Land Ceiling (ULC) Act, though repealed in Maharashtra in 2007, was reintroduced in a modified form in 2015. Initially, MIDC levied ULC Transfer Charges at 100% of plot value, which were later reduced to 25% in 2018 and 15% in 2019.
However, ULC charges are levied on the current owner with reference to previous transfers, which is arbitrary and inequitable. MIDC, being the owner of the land, cannot retrospectively impose ULC charges unless expressly provided in allotment letters, lease deeds, or transfer approvals.
Disclaimer
This blog is published in the public interest based on a review of various MIDC circulars. The author is not appointed or authorized by MIDC. While reasonable care has been taken to ensure accuracy, readers are advised to refer to the relevant MIDC circulars or seek professional advice before acting. This content is for general information only and does not constitute legal advice.
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