Narendra Sharma, Consultant (Legal)
AGREEMENTS VALID WITHOUT PAYING STAMP DUTY-“Purchase order”, “Airline ticket” and “Courier receipt” etc
Extracts from Section 3 and Entry No. 5 in Schedule I to the Indian Stamp Act, 1899 are reproduced below for ready reference.
(A) Entry No. 5 in Schedule I (Stamp Duty on Instruments) to the Indian Stamp Act, 1899 read as follows.
“5. AGREEMENT or Memorandum of Agreement-(a) if relating to the sale of a bill of exchange; (b) if relating to the sale of a Government security of share in an incorporated company or other body corporate; (c) if not otherwise provided for………
EXEMPTIONS: Agreement or memorandum of agreement—(a) for or relating to the SALE OF GOODS or MERCHANDISE EXCLUSIVELY not being a Note or Memorandum chargeable under No. 43”; (capitals mine)
It is evident that PURCHASE ORDER, being an Agreement for or relating to the SALE OF GOODS or MERCHANDISE EXCLUSIVELY, is exempt.
(B) Indian Stamp Act, 1899-Section 3-INSTRUMENTS CHARGEABLE WITH DUTY read as follows—
“Section 3-Subject to the provisions of this Act and the exemptions contained in Schedule I, the following instruments shall be chargeable with duty of the amount indicated in that Schedule as the proper duty therefor, respectively, that is to say—
(a) EVERY INSTRUMENT mentioned in that Schedule which, not having been previously executed by any person, is EXECUTED in India on or after the first day of July, 1899”; (capitals mine)
(i) It is evident that EVERY INSTRUMENT shall be chargeable with duty, which is EXECUTED in India.
(ii) The terms & conditions on “Airline ticket” or “Courier consignment receipt” etc are accepted orally by the buyer, rather there is IMPLIED ACCEPTANCE.
(iii) Therefore, “Airline ticket” or “Courier consignment receipt” etc are not EXECUTED INSTRUMENTS by both the parties, hence not chargeable with duty.
(iv) They all are agreements, however NOT CHARGEABLE WITH DUTY, and consequently, absence of stamping does not vitiate the terms and conditions at the time of dispute.
Note: The views expressed are my personal and a view point only.
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