Calcutta, July 31: The Bengal government is set to stop civic bodies from collecting a redundant fee from flat owners at the time of mutation, a step that is expected to help homebuyers save thousands of rupees.

"A government order directing the municipalities to stop collecting development fees will soon reach the chairpersons of the municipalities," Bengal municipal affairs minister Firhad Hakim told The Telegraph.

Several municipalities and corporations have been slapping an additional tax, usually called "development fee", on flat owners at the time of mutation although builders are told to pay a similar fee when the construction proposal is sanctioned.

Some civic bodies call it "mutation charge" or "value addition charge". The size of the fee varies, ranging between 0.5 and 1.5 per cent of the deed value of a flat. If the deed value of a flat is Rs 50 lakh, a municipality charging development fee at 1 per cent collects Rs 50,000 from a flat buyer under that head during mutation. It is this fee that is being stopped now.

The official mutation fee is a flat Rs 200 across all municipalities. The Calcutta Municipal Corporation charges Rs 100 as mutation fee.

The Calcutta Municipal Corporation does not charge the development fee. But the fee is levied by municipalities such as those in Baranagar, South Dum Dum, Uttarpara, Madhyamgram, Barasat and Barrackpore.

The Bidhannagar Municipal Corporation, which covers Salt Lake and parts of Rajarhat, and the Howrah Municipal Corporation, too, charge the fee but at a lower rate.

According to sources in the office of the inspector-general of registration, of the 3 lakh flats registered annually in Bengal, about 2 lakh are in the municipal corporation and municipality areas. Almost all the 125 municipalities in the state - 80 per cent of them are around Calcutta - have been collecting a development fee from flat owners for around three decades.

The West Bengal Municipal (Finance and Accounting) Rules, 1999, which govern all the civic bodies in the state except the one in Calcutta, do not have a provision for collecting a development fee. But many civic bodies have been collecting the fee, leaving them vulnerable to legal action.

Officials in the state municipal affairs department said charging a development fee amounts to double taxation. Last year, the municipal affairs department had written to the civic bodies asking them not to violate rules while collecting "mutation and other fees" from flat owners. The municipalities did not heed the letter.

Asked what prompted the latest move, minister Hakim said: "The matter has come to the notice of the chief minister. We feel people should not be burdened unnecessarily."

If a municipality demands development fees at the time of mutation, the flat buyer can lodge a specific complaint with the state municipal affairs department, the minister added.