Stamp Act is state’s milch cow
The next time actor Shah Rukh Khan signs an advertising contract to sell soap or a cola, he will have to register the agreement with the state, besides forking out a nominal amount as stamp duty.india Updated: Jul 03, 2009 02:02 IST
The next time actor Shah Rukh Khan signs an advertising contract to sell soap or a cola, he will have to register the agreement with the state, besides forking out a nominal amount as stamp duty.
Even sportsmen will have to pay their dues to the government for every tournament contract signed, like the Indian Premier League
Ditto for film distributors and producers having exclusive rights to broadcast a film.
The government has amended the Bombay Stamp Act, 1958, to generate additional revenue for the state kitty. It has brought into the tax bracket everyone from actors to sportsmen. Also, Build, Operate and Transfer (BOT) projects will have to be registered under the Act.
The amendment was issued last week, as was announced in the state budget in June, and made applicable from July.
Stamp duty is a tax collected by the government on documents executed in the state.
Earlier, there were 63 such documents, including property sales agreement. Now, its gamut has broadened to include all broadcasting, performance, advertisement, copyright contracts.
Accordingly, all agreements over Rs 1 lakh will be brought under the Act. Those below Rs 10 lakh will be charged Rs 2,500 Above Rs 10 lakh, a duty of Rs 5,000 will apply.
As for BOT projects like flyovers or sealinks, the agency implementing the project, including state agencies like the Public Works Department and Maharashtra State Road Development Corporation, will have to pay Rs 500 for contracts up to Rs 5 lakh and Rs 1,000 for contracts above that amount.
“The taxation is nominal but the potential for generating revenue for the state is huge. It is difficult to predict how much revenue will be generated. It will depend on how the taxation is monitored,’’ said Vidyadhar Kanade, finance secretary.
Finance department officials expect some resistance to the amendment.
“That kind of transparency may not be welcome. Stamp duty can be evaded if these agreements are registered outside the state. No one can stop someone like Aamir Khan from registering in Bangalore instead of Mumbai,” said an official, requesting anonymity.