Ranchi, July 16: The Jharkhand government is preparing to introduce a Municipal Cess on the purchase and transfer of land and buildings in urban areas as part of its efforts to enhance the financial capacity of urban local bodies.
The proposal is currently under departmental review and will be placed before the State Cabinet after a public consultation process.
Under the proposed framework, buyers of properties in urban areas will pay an additional Municipal Cess equivalent to 10 percent of the applicable stamp duty during property registration.
As the existing stamp duty is 7 percent, the new cess would add an effective 0.7 percent to the overall registration cost.
According to officials, the revenue generated through the cess will not be retained by the state government.
Instead, it will be transferred directly to the concerned Municipal Corporation, Municipal Council, or Nagar Panchayat where the property transaction takes place.
The government believes the measure is necessary because the rapid expansion of cities has increased the demand for civic infrastructure, while the revenue of urban local bodies has not grown at the same pace.
At present, municipal bodies largely depend on holding tax, trade licence fees, user charges, and other local taxes, which are considered insufficient to meet rising development needs.
Funds collected through the proposed Municipal Cess are expected to be used for improving urban infrastructure, including roads, drainage systems, street lighting, drinking water supply, sanitation, solid waste management, parks, sewage systems, and other essential public services.
Officials say the initiative will also improve the financial independence of municipal bodies and reduce their dependence on state government grants.
Before implementation, the Urban Development and Housing Department will release the draft proposal for public feedback.
Citizens, experts, and other stakeholders will be invited to submit suggestions and objections.
The proposal will be revised, if required, based on the feedback received before being presented to the State Cabinet for approval.
If approved by the Cabinet, the government will issue an official notification to implement the Municipal Cess.
The proposal is expected to cover 48 urban local bodies across Jharkhand, including Municipal Corporations, Municipal Councils, and Nagar Panchayats.
Officials stated that the move aims to create a stable source of revenue for urban local bodies, enabling them to provide better civic amenities and improve the quality of life in rapidly growing cities across the state.
