STAMP DUTIES

 

 

The Indian Stamp Act, 1899 (2 of 1899) is a fiscal statute laying down the law relating to tax levied in the form of stamps on instruments recording transactions. Briefly, the scheme relating to stamp duties, provided for in the Constitution is as follows:-

 

(a). Under Article 246, stamp duties on documents specified in Entry 91 of  the Union List (viz. Bills of Exchange, cheques, promissory notes, bills of lading, letters of credit, policies of insurance, transfer of shares, debentures, proxies and receipts) are levied by the Union but under article 268, each State, in which they are levied, collects and retains the proceeds (except in the case of Union Territories in which case the proceeds form part of the Consolidated Fund of India).  At present duty is levied on all these documents except cheques;

 

(b). Stamp duties on documents other than those mentioned above are levied and collected by the States by virtue of the legislative entry 63 in the State List in the 7th Schedule of the Constitution;

 

(c). Provisions other than those relating to rates of duty (which fall within the scope of Entry 91 of the Union List and entry 63 of the State List mentioned above) fall within the legislative power of both the Union and the States under Entry 44 of the Concurrent List in the 7th Schedule which reads as under:-

 
"44 Stamp duties other than duties or fees collected by means of judicial  stamps, but not including rates of stamp duty"

 
Thus, except as regards Union Territories, parliament’s legislative power extends to –

  1. Rate of stamp duty on documents mentioned in sub paragraph (a) above; and

  2. Machinery provisions in respect of all the documents.

  3. Stamp duties are levied by the Central Government, but within the States are collected and appropriated by the States concerned in terms of the provisions of Article 268 of the Constitution of India except in so far as collections in the Union Territories are concerned.  In view of the above constitutional provisions, section 9 of the Indian Stamp Act, 1899 authorises the Central Government or the State Government to reduce or remit, whether prospectively or retrospectively, the duty payable on the Central or the State instruments, as the case may be