Govt proposes repealing Indian Stamp Act, seeks public input on draft Bill

Syllabus: GS-III

Subject: Governance

Topic: Government policies and interventions.

Context: Indian govt proposes repealing the outdated Stamp Act, of 1899, introducing the modern ‘Indian Stamp Bill, 2023’; seeks public input within 30 days.

Issue: Indian Stamp Act.

Synopsis:

  1. A draft ‘Indian Stamp Bill, 2023’ is introduced to modernize the stamp duty regime in the country.
  2. The Department of Revenue, Ministry of Finance, invites public suggestions on the draft bill within 30 days.
  3. The existing Indian Stamp Act, of 1899, governed stamp duties levied by the central government but collected by individual states.
  4. Stamp duties are collected by states as per Article 268 of the Constitution.
  5. The draft bill covers various documents, including bills of exchange, cheques, promissory notes, bills of lading, letters of credit, policies of insurance, transfer of shares, debentures, proxies, and receipts.
  6. Stamp duties on specified documents are levied by the Union, while other stamp duties are imposed and collected by the states.
  7.  The Indian Stamp Act, of 1899, has undergone amendments but contains redundant/inoperative provisions, necessitating the need for more contemporary legislation.

Background:

Indian Stamp Act, 1899

The Indian Stamp Act 1899 raises government revenue. It governs stamp duty collection, legitimizing documents. Collected stamp duty proceeds are assigned to respective states. States mandate using purchased stamps for local instruments. Stamp duty, a state subject, varies, often based on market value. Parliament can legislate and set rates for certain documents nationwide. Parliament-set rates apply nationwide for specific documents. States have the authority to set stamp duties for other documents.

 

Conclusion: The government’s move to replace the outdated Stamp Act demonstrates a commitment to modernizing regulations, and seeking public feedback for transparency and inclusivity.

 

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