Amendment to the Bombay Stamp Act, 1958

By M.K. Gokhale
Dy. Supdt. of Stamps, Mumbai. (Retd.)

Hon’ble Finance Minister Mr. Jayant Patil has announced to reduce and rationalise the rates of stamp duty. He has proposed to reduce stamp duty and declare that maximum rates of stamp duty would be 5%. This suggestion is based keeping in view the comparative rates applicable in other states. He has also proposed to have Rs. 100/- as the minimum stamp duty payable under Articles which requires Non-Judicial Stamp Paper. He has also proposed to simplify and decentralise the process of giving refunds for used stamps.

With a view to amend certain Tax Laws in operation in the State of Maharashtra, Govt. of Maharashtra has placed L. A. Bill No. XXI of 2004, in the legislature Chapter II of the Maharashtra Tax Laws (Levy Amendment and Validation) Act, 2004 is for the purpose of Amendments to the Bombay Stamp Act, 1958. Certain Sections and Articles have been amended. The said Act is likely to come in force with effect from 01-07-2004.

Major amendments have taken place in respect of Article 36-A of the Schedule-I to the B. S. Act, 1958. This Article applies to the Leave and License Agreement.

Article 36-A has been totally amended and for clause (a), new clause is now substituted, as shown below :-

(a) where the leave & licence agreement purports to be for a term not exceeding thirty three months with our without the renewal clause and relates to property situated within the limits of –

(i) The District of Mumbai city and Mumbai Suburban District :

(A) Where the amount of average Seven Hundred Fifty rupees

annual rent plus the amount of for every term of eleven

security deposit, or money months or part thereof

advanced or to be advanced does

not exceed rupees two Lakh Fifty

Thousand for a Single term of

eleven months.

(B) Where the amount of average annual One thousand five hundred

rent plus the amount of security deposit or rupees for every term of

money or advanced or to be advanced eleven months or part thereof.

exceeds Rupees Two Lakh fifty thousand

but does not exceed Rupees Five lakh for

Single Term of eleven months.

(C) Where are amount of average annual Three thousand rupees for

rent plus the amount of security deposit or every term of eleven months

money advanced or to be advanced or part thereof.

exceeds rupees five lakh for a single

terms of eleven months.

(ii) The Municipal Corporation of the cities of Thane, Pune, Nagpur and Navi Mumbai, Nashik, Pimpri-Chinchwad, Kolhapur, Aurangabad, Amravati, Solapur, Sangli and Cantonments of Pune, Kirkee, Dehu Road, Devlali and Aurangabad. –

(A) Where the amount of average annual Five hundred rupees for every

rent plus the amount of security deposit or term of eleven months or

money advanced or to be advanced does part thereof.

not exceed rupees two lakh fifty thousand

for a single term of eleven months.

(B) Where the amount of average annual One thousand rupees for

rent plus the amount of security deposit every term of eleven months

or money advanced or to be advanced or part thereof

exceeds or to be advanced exceeds

rupees five lakh for a single term of

eleven months.

(C) Where the amount of average Two thousand rupees for every term of

annual rent plus the amount of security eleven months or part thereof.

deposit or money advanced or to be

advanced exceeds rupees five lakh for

a single term of eleven months.

(iii) In any other area excluding the area referred to in Sub-clauses (i) and (ii)

(A) Where the amount of average Three hundred rupees for every term of

annual rent plus the amount of security eleven months or part thereof.

deposit or money advanced or to be

advanced does not exceed rupees two

lakh fifty thousand for a single term

of eleven months.

(B) Where the amount of average Six hundred rupees for every term of eleven

annual rent plus the amount of security months or part thereof.

deposit or money advanced or to be

advanced exceed rupees two lakh fifty

thousand but does not exceeds rupees

five lakh for a single term of eleven

months.

(C) Where the amount of average annual One thousand rupees for every term of

rent plus the amount of security deposit eleven months or part thereof.

or money advanced or to be advanced

exceeds rupees five lakh for a single

term of eleven months.

While calculating stamp duty on such Leave and Licence Agreement, it is necessary to take into account of average annual rent as well as security deposit for a single term of eleven months as well as rate of stamp duty for every term of eleven months and part thereof.

With a view to avoid less payment of stamp duty on such Leave and Licence Agreement, one should go for adjudication under Sec. 31 of B.S. Act, 1958 in which case, adjudication fee of Rs. 100/- is to be paid. Such application is to made to Collector of Stamps of the District. If the applicant pays the stamp duty assessed by the Collector, the Collector shall proceed under Sec. 32 of the Act and certify the said instrument by endorsement that the full duty with which it is chargeable has been paid and then he shall return the said instrument to the applicant.