The countrys audit watchdog,Comptroller and Auditor General (CAG),has found several lacuna while checking records of collectors of stamp duty and sub-registrar offices in Gujarat. Lack of realisation of proper stamp duty seems to have cost over Rs 900 crore to the government between 2005-11.
In 2010-11 alone,a total of 480 cases of short realisation of stamp duty,registration fees and other irregularities,amounting to over Rs 600 crore,have been discovered. Cases pertaining to short levy of stamp duty,undervaluation of property and misclassification of documents stand out.
The (Revenue) department has not even furnished first replies in 360 cases, CAG observed in its recent report on the revenue receipts of the state.
These irregularities are not new. During the five years between financial years 2005-06 to 2009-10,CAG has pointed out similar 47 cases – of short levy,under assement and incorrect computation of stamp duty – involving close to Rs 300 crore.
In one of the major cases,CAG noticed that the revenue department officials did not levy stamp duty on the delivery orders of imported goods at Inland Container Depot and Air Cargo,valued Rs 1,05,870 crore,during the period from 2006-10. This deprived the state government revenue worth Rs 105 crore.
The auditor also spotted six lease agreements styled as concession agreements executed by Gujarat State Road Development Corporation (GSRDC) with private players during 2005-10,for construction of toll ways under Build,Operate and Transfer contracts. These agreements were not registered as instruments of lease and were executed on non-judicial stamp papers. This deprived the state Rs 37 crore in stamp duty and registration fee revenues.
During the period between 2006-10,11,924 companies were incorporated in Gujarat with total paid-up capital aggregating to Rs 5,800 crore,of which only seven companies paid the consolidated stamp duty.
CAG found that the information regarding payment of stamp duty by the remaining companies was not on record.
Similarly,4,306 companies were incorporated before April 1,2006,but have issued shares during the period from 2006-10. Accordingly,they were liable to pay stamp duty of Rs 64 crore. The revenue department did not have any mechanism to ascertain whether these companies had paid the stamp duty on issue and allotment of shares or not.
The department was also found lacking a mechanism to ascertain stamp duty liability of 11 companies registered in Gujarat,that had raised capital by way of IPO during 2006-10. Though three companies made voluntary payments of stamp duty,CAG found that the state lost Rs 3.88 crore due to non/short levy of stamp duty.
During 2008-09,the department had given permission to Axis Bank for payment of consolidated stamp duty on the issue of 15,000 debentures. CAG found that the department levied and collected duty of only Rs 2.50 crore instead of Rs 3.75 crore.
Even though CAG found that stamp duty and registration fees increased by 43 per cent in 2010-11 compared to the previous years,it went on to observe that there was leakage of revenue due to absence of system of coordination with various government organisations executing instruments liable for payment of stamp duty.
No rules prescribing the procedure for conducting inspection were framed and therefore,the revenue department could not monitor the realisation of proper stamp duty, it stated,adding that the internal control system of the revenue department was weak due to shortage of man power.