Comprehensive Training Course on State Receipts Audit: Focus on Stamps & Registration Receipts

1. Regional Training Institute, Ranchi Structured Training Courseware on State Receipts Audit Audit of Stamps & Registration Receipts RTI, Ranchi

2. Session Objectives At the end of these sessions, the participants will be able to • Explain the nature of Stamps and Registration receipts • Understand the assessment and collection mechanism and • Audit checks relating to Stamps and Registration receipts RTI, Ranchi

3. Stamp Duty • Indian Stamp Act – 1899 • Latest amendment 2001 • Stamp Duty included in Concurrent List; but • Duty on judicial stamps in State List RTI, Ranchi

4. Distribution between Centre and States RTI, Ranchi

5. Stamp Duty • Paid by executors of instruments by either, • Using impressed stamp paper of proper denomination, or • By affixing stamps of proper denomination on them RTI, Ranchi

6. Registration Fees • Indian Registration Act – 1908 • Consolidated all provisions relating to registration of documents spread over many Acts • Latest amendment in 2001 RTI, Ranchi

7. Purpose of Registration Act • To provide a method of public registration of documents • To inform people about legal rights and obligations arising/affecting a property • To prevent frauds RTI, Ranchi

8. Nature of Stamp and Registration Receipts • Levied on various types of instruments like, • Conveyance • Bills of exchange • Lease • Gift • Settlement • Power of Attorney • Agreements etc. RTI, Ranchi

9. Nature of Fees Stamp Duty • Every instrument mentioned in the schedules of the Act • Every bill of exchange/promissory note drawn in India • Every instrument executed outside India relating to property in India RTI, Ranchi

10. Adhesive Stamps Instruments requiring adhesive stamps to be affixed • Where duty is not exceeding 10 paise • Bills of exchange/promissory notes drawn out of India • Entry as advocate in High Court • Notarial acts • Transfer of shares by endorsement Adhesive stamps affixed, should be cancelled to prevent their misuse RTI, Ranchi

11. Exceptions to Payment of Stamp Duty • Instruments executed by/for/on behalf of Government • Sale/transfer/mortgage of any ship or vessel RTI, Ranchi

12. Registration Fees Required to be paid for, • Registration of documents • Searching the registers • Making copies after registration • Registrations under Section 50 of registration Act RTI, Ranchi

13. Registration Fees (contd.) • Issue of commissions • Filing translations • Attending at private residences • Safe custody and return of documents • Other matters decided by State Government RTI, Ranchi

14. Registration Fees (contd.) • Registration required for the following if property located in a particular district • Gift of immovable property • Other non-testamentary instruments where the value is above Rs.100 in immovable property and instruments acknowledging payment to this effect RTI, Ranchi

15. Registration Fees (contd.) • Leases of immovable property from year to year exceeding one year • Non-testamentary instruments transferring/assigning decree of court RTI, Ranchi

16. Exceptions to Payment of Registration Fees Given by Central Act (States give numerous exceptions) • Any composition deed • Instrument relating to shares in a joint stock company • Debentures issued/transferred by such a company RTI, Ranchi

17. Exceptions to Payment of Registration Fees (contd.) • Any document creating a right to obtain another document • Any decree/order of court • Instrument of partition made by Revenue Officer • Order granting a loan/collateral security RTI, Ranchi

18. Exceptions to Payment of Registration Fees (contd.) • Order granting/ securing repayment of agriculture loan • Endorsement on mortgage deed • Certificate of sale in an auction RTI, Ranchi

19. Optional Registration • Instruments of value under Rs.100 in immovable property or acknowledgements thereof • lease of immovable property for less than a year • Wills etc. RTI, Ranchi

20. Organizational Set up RTI, Ranchi

21. Mode of Valuation & Collection • Stamp Duty is charged on, • Value of consideration expressed in the document; or • Market value of property, whichever is higher • Market value fixed by Revenue Department • Based on locality RTI, Ranchi

22. Mode of Valuation & Collection (contd.) Payment is indicated on the instruments by means of a stamp as follows: • Description of stamps that may be used on the instrument • Instruments stamped with impressed stamps, number of stamps that may be used RTI, Ranchi

23. Mode of Valuation & Collection (contd.) • For bills of exchange/promissory notes, size of paper on which they are written • Every instrument chargeable with duty and executed by a person in India will be stamped before/at the time of execution RTI, Ranchi

24. Mode of Valuation & Collection (contd.) • Every chargeable instrument executed out of India to be stamped within 3 months of receipt in India • First holder of bill of exchange/promissory note in India to affix proper stamp and cancel it RTI, Ranchi

25. Mode of Valuation & Collection (contd.) • Where ad-valorem duty is to be charged in non-Indian currency, duty will be calculated based on rate of exchange on the date of the instrument RTI, Ranchi

26. Mode of Valuation & Collection (contd.) • Where ad-valorem duty is to be charged on stock/marketable security, duty will be calculated based on average stock value on the date of instrument RTI, Ranchi

27. Who Pays Stamp Duty? RTI, Ranchi

28. Remissions • State Governments can, • Exempt/remit stamp duty and registration fees • Consolidate duties in issues of debentures, bonds other marketable securities RTI, Ranchi

29. Penalties • Indian Stamp Act & Indian Registration Act provide for penalties • For executing instruments not duly stamped or registered • Penalties to range from Rs.100 – Rs.5000 • Imprisonment up to 7 years • Or both RTI, Ranchi

30. Registers & Records RTI, Ranchi

31. Audit Checks • Whether the checks required to be exercised by registering officers have been properly exercised • Whether proper authority exists for grant of exemptions • Verify how many documents were exempted from stamp duty and registration fees during the period under review RTI, Ranchi

32. Audit Checks (contd.0 • Whether effective date of grant of exemption/remission conforms to actual date of grant of exemption/remission • Whether concessions allowed to proper category of persons/instruments RTI, Ranchi

33. Audit Checks (contd.) • Verify OB and CB of Cash Book with reference to Allotment Register • Pick out cases of high value from Fee Book for detailed checking RTI, Ranchi

34. Audit Checks (contd.) • Check Remittance Register and verify remittances with reference to challans and entries in Cash Book • Review all cases of misclassification of documents RTI, Ranchi