Stamp Act revamp draft to be taken up next month

In an indication that stamp duty is unlikely to be subsumed in the Goods and Services Tax (GST),as recommended by the Thirteenth Finance Commission....

In an indication that stamp duty is unlikely to be subsumed in the Goods and Services Tax (GST),as recommended by the Thirteenth Finance Commission,the Centre is mulling revamping the Indian Stamp Act,1899. The archaic Indian Stamp Act needs to be reviewed and redrafted. There are provisions in the Act which are not relevant at all today. These provisions need to be deleted from the Act. So we are planning to revamp the entire Act, sources told The Indian Express.

Sources said many states had approached the Centre regarding the problems being faced by them due to the archaic legislation. The present legislation contains many provisions that have become obsolete over the decades,the sources said,adding that a draft is being prepared and will be taken up in a meeting with the states next month.

The government plans a complete overhaul of the Act as new technologies have come including franking machine and e-stamping. Similarly,new modes of payment,like cheques,are being used by people. The phenomenal progress in stock market transactions related to bonds,debentures and demat accounts have also not been captured in the Act.

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Stamp duty indicates a form of tax that is imposed on documents. Traditionally,a physical stamp tax stamp was needed to assert a documents legal validity. It is imperative for various different kinds of legal transactions including property related transactions.

Therefore,there is a pressing need to rewrite the entire act keeping in mind the changes that have taken place in the recent times,the sources added.

Although many of these developments have already been incorporated in the Constitution of India (Part 7,Schedule VII,Union List),yet they are still to find a place in the Stamp Act. The changes would see smaller denominations like the paisa giving way to the rupee,the amount of litigation being resolved and revenue leakage in stamp duty collection being plugged to an extent,the sources added.

The revamping is likely to increase public convenience too in the payment of stamp duty. Stamp duty rates vary from state to state and are a subject matter of the state government. In Tamil Nadu,for instance,about 8 per cent of the property value is claimed for stamp duty and about 1 per cent is claimed for registration charges of the property.