Stamp Duty: Who is liable for Stamp Duty and who is eligible for Compound Stamp Duty

  • Section 6 of the Stamp Duty Act (No. 12 of 2006) stipulates the party by whom the stamp duty is payable. It specifies the party in respect of 5 instruments.
    • Gazette Extra-Ordinary 1439/1 (Dated 03.04.2006) (from 04/04/2006 to 06/10/2006)
    • Policy of insurance - Person effecting the Insurance
    • Transfer or assignment of shares – Transferee or assigned
    • Lease or hire – Lessee
    • Claim by the service provider from the holder of a credit card - Credit Card Holder
    • In all other cases – the person drawing, making or executing the instrument
  • Section 7 – Compounding of Stamp Duty. CGIR may permit following persons
    • Policy of insurance - Person issuing Insurance Policy
    • Licenses – Issuing Authority
    • Credit Cards - Service Provider
    • Payments to Employees – employer (where employees more than 100)
    • In any other situation, depending on circumstances - person issuing the instrument (Considering the impracticability/inexpediency of stamping)

The person authorized to compound the Stamp Duty is required to make certification on the relevant instrument on a rubber stamp that may be used in the following format.(section 7(2) )