MODES OF STAMPING IN INDIA
By Shruti Agrawal July 29, 2016
In India, some of the contracts need to be stamped to make it legally valid. For example, if an individual is selling its property as per a written contract which is not on a stamp paper, or for which stamp duty is not paid, then such a document won’t be a legally binding document. To execute the sales deed it has to be on a stamp paper.
Such a stamp duty acts as transaction taxation and generates revenue for the government. In this blog, I have discussed different modes of stamping. In India there are three modes on stamping, however not all the mediums are available in all the states. Getting the document stamp from any of this medium is equally acceptable in all the states.
Paper Based Method
This method is also known as non-judicial stamp paper method. This is a traditional method. An individual has to buy stamp paper from the licensed vendor. He can then print the terms of the agreement on the paper or can affix the blank paper, which is signed by the executants, on the agreement, symbolizing the importance of stamp paper. A sample is available at http://www.delcampe.net/page/item/id,216543816,var,INDIA-10-Rs-NON-JUDICIAL-STAMP-PAPER-OVERPRINTED-GUJARAT-USED,language,E.html.
This method is the most common method and is flexible, as it can affix a day later after execution. However, this flexibility varies from state to state. For example, the Maharashtra Stamp Act, 1958 allows stamping of the document either on, before or a day after the execution date.
However, this method is time - consuming. One has to go to the license vendor to get the paper. There is a risk of fake stamp papers. Also in case of high stamp duty, a huge number of stamp papers are required which make the procedure fruitless. Moreover, time period for claiming refund of unused stamp paper is six months.
It is not a very common medium for stamping. An individual has to print the document on the blank paper and has to take it to the bank or any other authorized agency which has the franking machine. The document has to be franked before it is signed by the parties. One has to submit the application of franking to the bank or any other authorized agency.
Franking is the faster mode of stamping than the Paper - based method. The payment can be made through cash or demand draft. Moreover, there is no trouble of collecting it from the license vendors. A sample of franked document is available at http://www.humlog.net/news/stamp-paper-availability-bangalore.
However, there are some disadvantages of franking. Firstly, it is not available in all the cities. Secondly, it has to be done prior to the execution of the agreement. Thirdly, there are so specific guidelines or regulations regarding franking. Every state has its own regulation. Finally, an individual might have to incur additional franking charges.
E - stamping is one of the most recent development. It has made the procedure of stamping easier. The government of India has appointed Stock Holding Corporation of India Limited (SHCIL) as a Central Record Keeping Agency for the matters of e-stamping in India.
SHCIL has facilitated e-stamping in Karnataka, Himachal Pradesh, NCT Delhi, Gujarat, Daman & Diu, Dadra & Nagar Haveli, Uttarakhand, Rajasthan, Tamil Nadu, Puducherry, Assam, Uttar Pradesh, Chhattisgarh, Jharkhand and Jammu & Kashmir. Visit http://www.shcilestamp.com/FAQ.html to get more details for any particular state.
For getting a document e-stamped an individual needs to first check if the service is available in the individual state. Then the individual has to fill ACC (Authorized Collection Center) form providing the details of the parties and the transaction. One has to make the payment for stamping fees. The payment could be made by cash, cheque or demand draft. One can also make online payment through debit card, credit card, bank transfer, etc.
Stamp certificate has a micro print to check the tampering of the document, it has Unique Identification Code to check the authenticity of the certificate and it has a 2D-bar code to check duplication. A sample of E-Stamp certificate is available at http://chandigarhmetro.com/e-stamp-papers-in-chandigarh/.
This is the speediest and most convenient mode of stamping. One can get its stamp certificate immediately. It also helps the govt. to check counterfeiting. In fact, states like Delhi have made it compulsory for all the stamp duty to be paid through E-Stamping. However, this process is not available in all the states. If one has misplaced the certificate, he cannot get the second copy of the same. If one wants to cancel and get the stamp paper refunded, then he has to contact the ACC office. It cannot be done online.
Stamping in Maharashtra
To get a document e-stamped in Maharashtra one has to pay the stamp duty through electronic Secured Bank Treasury Receipt (eSBTR)-an online payment service. This service is not available in any other state. Maharashtra has different regulations regarding e-stamping as it did not renew SHCIL license.
To get an eSBTR one has to make the payment for stamp duty to the bank. The individual would be provided with a token number. SBTR (Secured bank and treasury receipt) is printed by the bank after receiving the token number. SBTR is the evidence of the payment to the government. List of the banks providing this service is available here.
E-stamping is an essential step to ensure that few of the transactions are legally valid. The method of stamping has evolved over time. Regulations of stamping vary from state to state. Almost every state has its own stamp acts. In this blog, I have summarized most common mode of stamping with their advantages and disadvantages, so that one can make an informed decision.
- E-Stamping, Franking, Stamp Paper: Paying Stamp Duty (http://www.bemoneyaware.com/blog/e-stamping-franking-stamp-paper-paying-stamp-duty/) (last seen on 26th July, 2016)
- Shabnum Kajiji, Methods of paying stamp duty not available in every state, (http://www.livemint.com/Money/17hOkMnoIMALcwpbSIXBQM/Methods-of-paying-stamp-duty-not-available-in-every-state.html) (last seen on 26th July, 2016)
- Shoaib Zaman, Duly Stamped, (http://www.businesstoday.in/moneytoday/financial-planning/electronic-stamping-is-a-convenient-way-to-pay-stamp-duty/story/201780.html) (last seen on 26th July, 2016)
- What is Stamp paper, Stamp Duty? (http://www.bemoneyaware.com/blog/what-is-stamp-paper-stamp-duty/) (last seen on 26th July, 2016)
- picture credit: https://supersevaservices.wordpress.com/2014/01/14/paying-stamp-duty-through-e-stamping-and-franking-have-become-easy-with-superseva/
Shruti Agrawal (Jindal Global Law School, 4th year)
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