DAY LIGHT LOOT BABUS DECIDE TO CHARGE PUBLIC FOR E-STAMPING 1st January 2011 Issue

    By Firoz.T.Totanawala

The Bangalore Metro Reporter

1st January 2011 Issue

                   DAY LIGHT LOOT

           BABUS DECIDE TO CHARGE PUBLIC FOR E-STAMPING

The Government had introduced e-stamping to collect Stamp duty and entrusted the task to the Stock Holding Corporation of India. The company is entitled to 0.65 percent commission on the stamp duty collection. As the e-stamping has not received favourable response from the public, the company wanted hike in commission. And now, out of blue the Government has permitted the company to collect service charges from the public for e-stamping up to Rs 5000! It is the Government who has to pay the commission to the company out of stamp duty collections. Now, the public also have to pay the service charge along with the Stamp duty.

After the outbreak of the Telgi scam, many modes of payment of Stamp duty were experimented. The Lokayukta recommended the e-stamping and finally the Registration department zeroed on it. Arguably, the till now system of payment of stamp duty and Registration fee through Demand Drafts/Pay Orders was working well for the past eleven years and it still remains people’s favourite system.

The E-stamping was implemented in 2008 as another mode of payment of stamp duty. Out of blue, a company by name Stock Holding Corporation of India was chosen as the central Record keeping Agency to collect the Stamp duty on behalf of the Government through its branches and franchisees. The then IGR Shashidhar entered into an agreement with this company in February 2008 and as per the agreement, the company was entitled to receive 0.65 percent commission on the stamp duty collected. It should be noted that even when the stamp papers were in circulation, it was the Government which paid one percent commission to the licensed stamp venders. The stamp venders were required to purchase the Stamp papers from the Government treasury. And at the end of the day, the stamp vendor would have got 0.50 percent, as the process of purchasing the stamp papers involved going to the treasury, submitting indent, paying the amount and payment of ‘mamool’ to the staff to get the stamp papers early and expenses towards establishment and salary to the employees. In this comparison, the e-stamping commission seems to be high as people have to directly go to the company’s counters or franchisees to pay the stamp duty.

UNFAVOURABLE FORMAT

On the contrary, the format of e-stamping has not found favour with the people as it is done on a plain paper of poor quality. People are used to prepare their documents on the special documents sheets and pay the stamp duty and registration fee through Demand Drafts. In respect of smaller denominations too, they get the franking or certification of stamp duty on the same document sheets which resemble the earlier stamp papers. This caters to the people’s psychological satisfaction of writing the deed on bond paper.

TOO MANY DETAILS & LONG QUEUES

From the year 2008, the Government is paying 0.65 percent commission to the e-stamping company. As is natural, people have not favoured this system of payment of stamp duty as they have to fill up the application giving details about the parties involved, nature of transactions etc and stand in long queue to pay the stamp duty and get the e-stamping paper. Besides, the e-stamping details itself occupies three fourth of the paper, and there is nothing left for writing the document. Consequently, people have not accepted it whole heartedly and choose it merely for smaller denominations requirements. Eventually, the Stock Holding Corporation of India received small turn over and meager commission and became upset on the outcome. For example the company only received Rs 6.50 for e-stamping 1000 rupees. It is though nobody’s fault that e-stamping is hardly used to pay heavy stamp duty as people still prefer Demand Drafts.

Interestingly, the company accepts up to Rs 50000/- in cash for e-stamping from the public and if the amount is more than this, the parties have to make payment through DD. Thus when people can get the registration done by paying stamp duty through DD, why should they purchase the DD to submit it to the company to get e-stamping?

PLEASE DO SOMETHING SAAR!

Whatever, the company was pressurizing the department for more commission irrespective of the agreement. It had booked the successive IGR’s trying to make e-stamping compulsory. But the act does not permit it. The IGR’s had also made all out efforts to force the sub registrars to only accept e-stamping but in vain.

OK, DONE!

And now, all of a sudden, the company and the department issued advertisements directing the people to pay Rs 10 as service charge for e-stamping up to Rs 100 and Rs 15 for e-stamping up to Rs 5000 to the company. This is simply obnoxious. As the lion’s share of e-stamping is done is smaller value the service charge seems to be Astronomical. For example, for Rs 100, the service charge is 10%, up to Rs 5000 the service charges vary from 15% to 3% and the agreed commission is 0.65%.

What more the service charges have to be paid by the public directly to the company. Interestingly, the service charge for franking in offices where franking machines are rented is Rs 5 for any amount up to Rs 999. Why should people pay service charge to the company for payment of stamp duty to the government? This is nothing but penalizing the public who want to pay stamp duty through e-stamping! It is time; the Government should stop this day light loot by the company in collation with few officials of the registration department.