If you are appointed as a Compliance Officer of The Global Bank Ltd., how you will advise to Mr. Rohit Aggarwal, Branch Manager to remove the Knowledge Gaps on Legal and Regulatory Compliance in Banks with regard to proc

Stamp duty means an extra charge placed on certain legal documents by purchasing a stamp to be placed on said document. It can either be fixed or variable (according to the legal instrument), levied on certain legal documents, thereby providing that law can exclude certain documents from the purview of stamping and stamp duty is paid by purchasing a stamp and not by any other means. In India, levying of stamp duty is governed by two legislations, i.e., a Stamp Act legislated by the Parliament and Stamp Act legislated by Legislature of each State. Article 246 read with Schedule VII of the Indian Constitution state that Parliament can enact laws relating to rates of stamp duty in respect of bills of exchange, cheques, promissory notes, bill of lading, letter of credits, insurance policies, transfer of shares, debentures, proxies and receipts etc. It is to be noted that Legislature of State can legislate on any matter other than those mentioned above. According to section 3 of the Indian Stamp Act, 1899 (the Parliament Legislation) stamp duty will be levied on the following document: List of documents mentioned in First Schedule of the Parliament Legislation; Every bill of exchange payable otherwise on demand or promissory note drawn or made out of India and accepted or paid or presented for acceptance or payment, or endorsed, transferred or otherwise negotiated and Every instrument (other than a bill of exchange or promissory note) mentioned in First Schedule, which not having been previously executed by any person, is executed out of India, related to any property situate, or to any matter or thing was done or to be done in India and is received in India. Liability of Paying Stamp Duty: An agreement, among the parties, can impose liability on a party for payment of the stamp duty. Section 29 of the Parliament Legislation, gives a choice to the parties of an agreement to decide the party who shall be liable to pay the stamp duty levied on the concerned agreement which, in the absence of an agreement, imposes the liability of paying stamp duty on certain persons. Penalty for non-compliance with the Parliament Legislature or the State Legislature. The legislatures enacted by the Parliament and the respective State Government under various provisions of the respective Acts provide that an unstamped or an inadequately stamped instrument will not be admissible as evidence.