The government is considering the repeal of the Indian Stamp Act, 1899 and the introduction of a new legislation governing the stamp duty system in the country. The Department of Revenue, under the Ministry of Finance, has issued an invitation for public input on the draft 'Indian Stamp Bill, 2023' over the next 30 days.
In a statement, the Ministry of Finance revealed, "The Department of Revenue, Ministry of Finance, Government of India, has formulated a draft 'Indian Stamp Bill, 2023' to modernise the existing stamp duty regime. Once enacted, this Bill will replace the outdated Indian Stamp Act, 1899."
The Indian Stamp Act, 1899 outlines the legal provisions for the taxation of transactions through the use of stamps. Although stamp duties are imposed by the central government, the states are responsible for their collection and appropriation as per the provisions of Article 268 of the Constitution.
Stamp duties related to documents listed in entry 91 of the union list of the Seventh Schedule (such as bills of exchange, cheques, promissory notes, bills of lading, letters of credit, policies of insurance, transfer of shares, debentures, proxies, and receipts) are imposed by the Union. On the other hand, the states collect other stamp duties on various documents.
The Ministry of Finance emphasised that the Indian Stamp Act, 1899, a pre-Constitution Act, has undergone amendments over time to adapt to a more contemporary stamp duty system. However, certain provisions within the act have become obsolete, necessitating a reorientation of the legislation to better reflect current realities and objectives.
