DRAFT
INDIAN STAMPS BILL, 2023 - GOVERNANCE
News:
Govt proposes repealing
Indian Stamp Act, seeks public input on draft Bill
What's
in the news?
●
The Department of Revenue, Ministry of
Finance has prepared a draft ‘Indian Stamp Bill, 2023’ to repeal the Indian
Stamp Act, 1899 for the stamp duty regime in the country.
Key
takeaways:
●
The stamp law aims to prevent tax evasion by making documentation of transactions
mandatory for legal validity and enforceability.
Indian
Stamp Act, 1899:
Objective:
●
It lays down the legal provisions for tax
levied in the form of stamps on instruments recording transactions.
●
It covers Stamp duties on instruments
specified in Entry 91 of the Union List.
Need
for Reforms:
1.
Old Laws:
●
The Indian Stamp Act 1899 is an old fiscal
law governing taxes levied via stamps on transaction instruments. It predates
the Constitution.
●
The Law Commission in its 67th report
submitted in 1976 made extensive recommendations for reforms.
2.
Proposed Changes to Boost Ease:
●
Proposed legislative changes in the new
Indian Stamp Bill will likely ease payment modes and access.
●
Introduction of consolidated duty slabs
across states could provide uniformity. Digital property registration may also
facilitate convenience.
3.
Curbing Duty Avoidance Tactics:
●
The Bill may curb tactics used to avoid
duty like undervaluing property sales.
●
It could mandate links between sale prices
and circle rates to prevent under-reporting. Strong anti-evasion measures will safeguard
revenue.
4.
Bolstering the Digital Economy:
●
An updated all-digital stamp duty system
will propel India’s digital economy.
●
Electronic documentation and registration
via a single portal or platform will enhance transparency and efficiency.
Key
Highlights of Draft ‘Indian Stamp Bill, 2023:
1.
E-stamping:
●
The new law will equip India for a seamless digital era as it has a
provision of e-stamping digitally.
2.
Definition:
●
The draft Indian Stamp Bill defines an
electronic stamp or e-stamp as an electronically generated impression denoting
the payment of stamp duty by electronic means or otherwise.
Stamp
Duties:
●
Stamp duties are collected by states per the Constitution despite imposition by the
Central Government.
Levied
by:
●
Stamp duties are levied by the central government, but within the
states are collected and appropriated by the concerned states in terms of
provisions of Article 268 of the Constitution.
Union
List:
●
The Stamp duties on documents specified in
Entry 91 of the Union List of the Seventh Schedule (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.
State
List:
●
Stamp duties on documents other than those mentioned above are levied and collected
by the States by virtue of the legislative Entry
63 of the State List of the Seventh Schedule of the Constitution.