What's stopping states from reducing stamp duty

livemint.com:

Mint explains the significance of stamp duty revenue for states. States are left with fewer avenues to raise tax revenues independently after the introduction of goods and services tax (GST) in July 2017. Many state-level levies were subsumed into state GST.

While states get to keep the state GST on goods and services consumed within its borders, they are not free to tinker with the rates. State GST is the biggest source of tax revenues for states—more than 40% at the all-India level. For states, other major sources of tax revenues include value-added tax (VAT) on petroleum products and excise duty on alcohol.

States have the freedom to reset the rates for both. Stamp duty is another important source of tax revenue, particularly for bigger states. Like VAT and excise duty, the stamp duty varies from state to state.

Kerala is one the states that levy a high stamp duty at 8%. The rate is 7.5% in Madhya Pradesh, 7% in urban Haryana, Uttar Pradesh and Tamil Nadu, and 4.9% in Gujarat. Besides these taxes, states are entitled to a share in central taxes (personal income tax, corporation tax, central GST).

However, that share is determined by the recommendations of the Finance Commission and many states are unhappy with the current devolution formula. A Reserve Bank of India (RBI) publication States Finances: A Study of Budgets estimated the share of stamp duty and registration fee in the combined own tax revenues of all states and Union territories at 11.7% for 2023-24. Property registration involves two levies: Stamp duty and registration fee.