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This direct and important amendment will provide significant financial relief to the trade and industry sector. It will also increase transparency in the renewal process. At the same time, this ease of doing business is expected to increase the use of bank guarantees, which will also lead to a positive rise in government revenue, the Minister said.
The old cumbersome rules regarding stamp duty on bank guarantees used in commercial transactions, government contracts, and infrastructure projects in the state have been changed.
Stamp duty on bank guarantees will now be charged according to a separate independent category. A significant bill amending the Maharashtra Stamp Act (1958) was passed today in the Legislative Assembly. Revenue Minister Chandrashekhar Bawankule presented the bill.
What was the earlier rule?
Previously, there was no separate category prescribed in Schedule-I of the Act for bank guarantees and financial guarantees. As a result, full stamp duty was levied on such instruments under Article 54 as ‘security bonds’. Most importantly, whenever these guarantees were renewed or their validity period was extended, even if the guaranteed amount remained the same, the full stamp duty equivalent to the original instrument was recovered again, Bawankule said.
What has changed now?
Under the new law, a ‘separate article’ has been included for bank and financial guarantee instruments.
Key change
This direct and important amendment will provide significant financial relief to the trade and industry sector. It will also increase transparency in the renewal process. At the same time, this ease of doing business is expected to increase the use of bank guarantees, which will also lead to a positive rise in government revenue, the Minister said.
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