Background
The Indian Stamp Act, 1899 is a fiscal statute that lays down the law relating to tax levied in the form of stamps on instruments recording transactions. The Act is over a century old and has been amended several times to enable a more modern stamp duty regime. However, some of its provisions have become redundant or inoperative and need to be reoriented to reflect the present realities and objectives.
Draft Bill
The Department of Revenue under the Ministry of Finance has prepared a draft ‘Indian Stamp Bill, 2023’ to align it with the modern stamp duty regime. The draft bill proposes to repeal the Indian Stamp Act, 1899 and enact a new legislation that will govern the levy, collection and administration of stamp duties in the country. The draft bill has been uploaded on the website of the Department of Revenue [https://dor.gov.in/stamp-duty/] for inviting suggestions from the public in a prescribed proforma within a period of 30 days.
Key Features
The draft bill aims to simplify and rationalize the stamp duty structure and rates, harmonize the stamp duty provisions with other relevant laws, streamline the procedure for adjudication and valuation of instruments, introduce electronic stamping and payment facilities, and strengthen the enforcement and dispute resolution mechanisms. The draft bill also seeks to clarify the roles and responsibilities of the central and state governments in relation to stamp duties, as well as ensure better coordination and cooperation among them.
Implications
The draft bill, if enacted, will have significant implications for various stakeholders involved in transactions that require stamping of instruments, such as banks, financial institutions, companies, individuals, etc. The draft bill will also affect the revenue collection and administration of both the central and state governments. The draft bill is expected to bring more transparency, efficiency and uniformity in the stamp duty regime, as well as reduce litigation and compliance costs.
How will this affect me?
If you are involved in any transaction that requires stamping of an instrument, such as a contract, a deed, a bond, a share certificate, etc., you may be affected by the draft bill. Depending on the nature and value of your transaction, you may have to pay a different amount of stamp duty than before, or use a different mode of payment or stamping. You may also have to follow a different procedure for getting your instrument adjudicated or valued by the authorities. You may also face different consequences if you fail to comply with the stamp duty provisions or if you are involved in any dispute over stamp duty matters.