President clears a uniform stamp duty system for securities transactions

The President cleared a uniform stamp duty system on Thursday, putting an end to a regime with varying stamp duties in different states for securities transactions. The government had originally moved to bring uniformity in rates and implementation of stamp duty as part of the budget speech. The Finance Bill with the provisions for amendment was passed in the Lok Sabha on February 12. It was passed in the Rajya Sabha the next day. Brokers had requested scrapping of the levy saying that introducing a central tax levy is burdensome.  The government said on Thursday that the tax rate would be revenue neutral.

“While fixing the rates, charged by Maharashtra were taken as the benchmark as Maharashtra accounts for around 70 per cent of the total stamp duty collection in the country. However, the rates are chosen in such a manner that it provides a revenue neutral position to the state governments while reducing overall tax burden for investors,” said a government statement on the development.

There is to be a coordination council to review or revise stamp duty rates. The government will notify the required rules separately.  The council will consist of both central and state government representatives, according to the release.