The Hindu : Tamil Nadu / Chennai News : Lacuna in Stamp Act deprives Tamil Nadu of huge revenue

Online edition of India's National Newspaper
Tuesday, May 15, 2007
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Tamil Nadu

Tamil Nadu - Chennai

Lacuna in Stamp Act deprives Tamil Nadu of huge revenue

Special Correspondent

5,970 appeal cases, involving a disputed revenue of Rs. 2,477 crore in Sales Tax, were pending at the end of March 2005

CHENNAI: In the absence of any provision to levy stamp duty on power of attorney documents, the State Government is losing crores in registration fee, the Comptroller and Auditor-General (CAG) of India has said.

The report for the year ended on March 31, 2006 said there was a huge loss of revenue due to a lacuna in the Indian Stamp Act. A test check of 2,846 instruments revealed that the executants had given absolute right to their agents for demolition, promotion, construction and sale of the property. All these properties were registered in 28 sub-registries in and around Chennai, without any consideration. So, they attracted a stamp duty of just Rs. 100 for each document. "Due to the absence of provision of charging stamp duty on the documents, a revenue of Rs. 141.55 crore was foregone," it said.

The Indian Stamp Act stipulates that the rate of stamp duty for a deed of power of attorney be the same as that of conveyance deed, if a consideration was involved. However, the Act is silent about power of attorney when given without consideration. The report said that when it was pointed out to the Department, the Inspector-General of Registration said in February 2006 that a proposal to revise the stamp duty rates for general power of attorney was under consideration.

As for the Sales Tax Department, the report said that at the end of March 2005, more than 5,970 appeal cases, involving a disputed revenue of Rs. 2,477 crore, were pending before the Appellate Assistant Commissioners and the Appellate Deputy Commissioners. More than 14,220 cases, involving a disputed revenue of Rs. 1,372 crore, were pending before Sales Tax Appellate Tribunals. About 1,390 appeals, involving a disputed revenue of over Rs. 73 crore, were pending for more than three years before 12 appellate authorities.

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