In our article What is Stamp paper, Stamp Duty? we had talked about what is stamp paper and stamp duty, who pays it,how much to pay,what was Telgi Stamp Paper Scam. In this article we shall see various ways of paying stamp duty such as non-judicial stamp paper,Franking,estamp paper and eSBTR that is used in Maharashtra.
Why do you need stamping?
Certain transactions such as buying, selling or leasing property, power of attorney, business agreements need to be documented, especially those that has a financial aspect to it. But even if you write the agreement details on paper, and have signed how do you ensure that other party (or relatives of other party) does not back out or comes back to claim that transaction did not take place. Many types of documents are only valid if printed on a specific value stamp paper (Rs. 10, Rs. 100, Rs. 500 and so on). The sale of these papers generates revenue for the government and acts as a kind of transaction tax. Paying stamp duty is an essential part of almost any transaction you do in India, from buying or selling a house to setting up a business agreement, all Agreements, Bonds, Powers of Attorney etc .
How to pay stamp duty?
There are three ways to pay stamp duty. However, not all states have all three options available. If all methods are available, all are recognised legally and the choice is with the individuals concerned. These options are discussed in detail in our article Stamp Paper,Franking and e Stamping.
- Using papers bearing impressed stamps (non-judicial stamp paper)
- Using the e-stamping facility
- Using a franking machine
Table of Contents
Stamping using Non Judicial Stamp Paper
The most common way to pay stamp duty is by purchasing non-judicial stamp paper from a licensed vendor. Then, either the details of the transaction is written on the paper or a blank stamp paper is affixed to the agreement documents and signed by the executants, indicating that the stamp paper is an integral part of the documentation.
There are many disadvantages to using physical stamp paper. For instance, it can be purchased only from a licensed vendor and vendors, often, do not keep stamp papers of extremely low value (less than Rs 100) or of extremely high value (over Rs 750). Therefore, for the ease of getting things done, people often resort to buying stamp paper from an unlicensed vendor at the risk of purchasing counterfeit papers. If the stamp duty payable is a large denomination, you will have to buy a number of papers to meet the requirement, making the process even more cumbersome. Image given below shows the document on Rs 100 stamp paper.
You might have seen postal envelopes with the stamp denominations, NOT in actual stamps but sort-of stamped in RED or BLACK (Image below), which includes the postal amount. No separate stamps are to be affixed for such envelopes. This is called as FRANKING, Postal Franking. This is usually adopted for Bulk postings–like magazines, letters from companies to shareholders, etc/
Franking of document is similar. You have to submit an application at an authorised bank or a franking agency. The document for which stamp duty is to be paid is printed on plain paper, before the parties sign it, and a stamp is affixed on the paper indicating the value of the stamp duty paid. The major benefit is that it is quick, especially if payment is made in cash or using a demand draft. Sample of franked document from humlog.net Stamp Paper Availability in Bangalore is as follows. I used franking when I had to open my locker in he bank.
The primary drawback is that franking machines are not available at all bank branches. In addition, there are no uniform rules for authorised franking agencies. This could result in difference in rules among states and even among banks within a state. Also, each bank has a franking quota. This means that if the denomination you need is higher than the bank’s quota, the bank should be informed sufficiently early to conclude the transaction.
The Indian government introduced e-stamping to tackle counterfeiting and make the payment of stamp duty easier and glitch free. In fact, in certain states, such as Delhi, all stamp duty needs to be paid through e-stamping. The central government has appointed the Stock Holding Corporation of India Limited (SHCIL) as the Central Record Keeping Agency (c) for all e-stamps used in the country (www.shcilestamp.com). Currently, SHCIL is responsible for everything-from user registration to administration, all e-stamping applications and maintenance of records. SHCIL has also designated authorised collection centres, or ACCs-scheduled banks-that will issue certificates to users. Some of the states where e-Stamping is available are : KARNATAKA( Only for Karkala ),HIMACHAL PRADESH,NCT DELHI,GUJARAT,DAMAN & DIU,DADRA & NAGAR HAVELI,UTTARAKHAND,RAJASTHAN,TAMIL NADU,PUDUCHERRY,ASSAM,UTTAR PRADESH,CHHATTISGARH,JHARKHAND & JAMMU & KASHMIR. Electronic-stamping is not available in Maharashtra as the licence for SHCIL was not renewed by the state. but one can use electronic secured bank treasury receipt (eSBTR)-an online payment service.
The benefits of using e-stamps: It can be generated within minutes and is tamper-proof and all data is saved by SHCIL. In addition, an e-stamp’s authenticity can be verified online using the enquiry module on the website as each e-stamp generates a unique identification number. To Verify the e-stamp paper go to https://www.shcilestamp.com/eStampIndia/VerifyCertificate.es?rDoAction=VerifyCert and enter the details as shown in image below. Click on image to enlarge.
Disadvantages of using e-stamps: The major flaw is that if the e-stamp certificate is misplaced, a duplicate copy cannot be issued. Also, if you wish to cancel the request for an e-stamp for a refund, it can be done only at SHCIL offices and not at the ACC that issued the certificate.
How to get e-stamping done:
- First, you will have to go to the SHCIL website, www.shcilestamp.com, and check if your state government allows e-stamping. The site also has information on which transactions require stamping and addresses of collection centres.
- If the option is available in your state, you will have to fill an application form at an ACC. The application form should have details of the parties involved and the transaction for which it is to be used.
- This form is to be submitted along with payment for the stamp certificate. You can pay in currency or use a cheque or demand draft if it is done at the ACC. Online payment can be made using debit cards, credit cards, pay orders, RTGS, NEFT or through an account-to-account transfer.
Paying Stamp Duty in Maharashtra
Electronic-stamping is not available in Maharashtra as the licence for SHCIL was not renewed by the state. Hence, since July 2013, you can pay stamp duty online via an electronic secured bank treasury receipt (eSBTR)-an online payment service. It is not an option in any other state.The state govt of Maharashtra has decided to do away with franking of documents for amounts above Rs 5000. This futuristic method of Stamp Duty (and Registration Fees) collection was launched on July 26, 2013 with IDBI as the participating bank. In Maharashtra collection of stamp duty increased from Rs. 2,533 crore in FY 2002-03 to Rs. 16,115 crore in FY 2012-13. In the year 2013-14, the revenue collected through the eSBTR system was around Rs. 26977.56 crore. List of Banks and designated branches providing eSBTR facility is available at https://gras.mahakosh.gov.in/echallan/frmavailablebank.php
In this method,
- One can pay stamp duty and/or registration fee online through bank portal or over the counter at any bank authorised by the department.
- After paying stamp duty and/or registration fee online or over the counter at authorised banks, citizens will get a token number.
- Authorised banks will print the SBTR (Secured bank and treasury receipt) after producing the token number.
- The eSBTR is a receipt of duty paid to the government. It is printed on secure stationery issued by banks. Sample eSBTR receipt is shown below. Click on image to enlarge
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Which method of paying stamp duty you have used. Which one do you prefer? How easy/difficult it was to pay stamp duty?