Stating that “significant development activities” have taken place in various parts of Gujarat since 2011, the Comptroller and Auditor General of India (CAG) has indicted the Gujarat government’s Revenue Department for not revising the Annual Statement of Rates (ASR) of land or jantri in the state since 2012 resulting in loss of opportunity to generate revenue.
“Since 2011, significant development activities have taken place in various parts of the state. Introduction/expansion of Bus Rapid Transit System in Ahmedabad, Rajkot and Surat districts, completion of River Front project and commencement of work for Metro Rail project in Ahmedabad district were some of the noticeable developments which have a direct impact on the upward movement of the market value of the immovable properties. However, due to non-revision of ASR, the (Gujarat) Government had forgone an opportunity for revenue realisation which is based on the current market value of immovable properties,” the national auditor stated in its report on revenue sector for 2016-2017, which was tabled in the Gujarat Assembly on Wednesday.
The CAG has recommended the state government to “strictly adhere to its own policy of yearly revision of ASR, so as to plug the leakage of revenue”.
In its report, the CAG has also raised questions over the ASR of 2011, while calling the rates “unrealistic”. “The government may formulate a sound scientific valuation process to estimate property value with specific, streamlined procedures,” the report stated while mentioning some of the deficiencies in the survey for ascertaining the market value of properties for the ASR 2011.
The ASR, or jantri in local parlance, is being issued by the state government showing the market rates of land in different parts of the state for the purpose of determination of value of immovable properties and levy of stamp duty. The stamp duty is one of the important revenue sources for the state government.
Explaining the importance of ASR in revenue generation of the state, the CAG stated, “…ASR showing the market value of the immovable properties at par with prevailing real estate market rates in the State becomes extremely important as it helps in assessing as well as fixing the rate of the property under transaction for securing proper revenue realisation.”
The CAG further stated that it selected ASR revision for its audit as “…it was found during local inspection of offices of the sub-registrars and collectors that the variation between the market value of the property determined as per the ASR and the consideration mentioned in the instruments were large. Besides, undervaluation of properties was noticed due to incorrect application of rates and non-compliance of instructions in ASR in a number of cases.”