Overview of The Stamp Act 1899

Overview of The Stamp Act 1899: Introduction; Federal Stamp Duty

It is a Federal Law and extends to the whole of Pakistan
Under Section 75 of the Act, the power has been delegated to Province to make their own Rules and Schedules to collect the Stamp Duties in their Provinces.
There are 65 Articles in the Schedule of Federal Act, on which the Stamp Duty is liable / collected on various instruments.
Here we have managed to cover the stamp Act, 1899 as related to province of SINDH.

Introduction; Sindh Stamp Duty

The Stamp Duty is charged on various instrument at the time of their preparation / execution,
The Sindh Province also follows the Stamp Act, 1899 for the collection of the said Duty, Overview of The Stamp Act 1899
The Board of Revenue (BOR) is the collecting Authority of Stamp Duty in Sindh Province.
The Sindh Government (BOR) has introduced its own Schedule, whereby the Stamp Duty is collected.
As compared to the Federal Schedule, there are 31 Articles only in the Sindh Stamp Schedule.

Which Instruments are liable to pay Stamp Duty;

There are some Articles which a company is generally held liable to pay Stamp Duty;

Article No. 1;
Article No. 2;
Article No. 7;
Article No. 12;
Article No. 15(a);
Article No. 15(b);
Article No. 21;
Article No. 27;
Article No. 31;

Acknowledgment of Receipt (Payment) Affidavit (Undertaking)

Bill of Entry
Issuance of Shares
Services Order / Contract Agreement Purchase Order
Lease Agreement / Rent Agreement Power of Attorney
Transfer of Shares

Which Instruments are liable to pay Stamp Duty;

Article No. 1;
Acknowledgment of Receipt
The Company is required to affix / pay stamp revenue ticket on each and every payment voucher according to the following slabs;

DUTY

Where the payment is up to 2,000/- Rupees 2/-
Where the payment is more than 2,000/- Rupees 5/-
Article No. 2;
Affidavit (Undertaking)
Whenever, an affirmation or declaration is given by the person, he shall be required to pay stamp duty @ 50 Rupees.

Which Instruments are liable to pay Stamp Duty;

Article No. 7;
Bill of Entry
The Company is required to pay stamp on every bill of entry at import / clearance stage 1,000/- w.e.f. 02/2018 (Weboc)
Article No. 12;
Issuance of Shares (New, Right, Bonus, Spice)
At the time of issuance of shares, the company is required to pay stamp duty @ 0.5% of the value of shares.
Article No. 15(a);

Services Order / Contract Agreement

If the company enters into an agreement for any services, it would be required to pay the stamp duty @ 0.35% of the amount of the agreement.

Which Instruments are liable to pay Stamp Duty;

Article No. 15(b);
Purchase Order
The company is liable to pay stamp duty @ 0.25% of the purchase order amount.
Article No. 21;

Lease Agreement

The company is also liable to pay stamp duty @ 1.5% of the rental amount as mentioned in the rental / lease agreement. It remains important to mention here that the stamp duty is paid before the execution (signing) of the agreement.

Which Instruments are liable to pay Stamp Duty;

Article No. 27;
Power of Attorney
Whenever, POA is being given to a person, he shall be liable to pay stamp duty as per the following table;

RUPEES

Authorizing one or more person for a single transaction 200/-
Authorizing not more than 5 person for more than one transaction 500/-
Authorizing more than 5 but less than 10 person for more than one transaction 1,000/-

Which Instruments are liable to pay Stamp Duty;

Article No. 31;
Transfer of Shares (Listed, Unlisted)

If the Company transfers the shares, it is liable to pay stamp duty as per the following table;

Physical Shares @ 1.5% of face value.
Electronic Shares transfer by CDC @ 0.15% of face value

Payment of Stamp Duty;

S. NO.	ARTICLE	DESCRIPTION	WHEN TO PAY	HOW TO PAY	WHO TO PAY
1	Article No.1;	Acknowledgment of Receipt	At the time of execution	Revenue Tickets	Executed Person
2	Article No.2;	Affidavit	At the time of execution	Stamp Paper	Deponent
3	Article No.7;	Bill of Entry	At Import Stage	Goods Declaration	Executant
4	Article No.12;	Issuance of Shares	Before Issuance of Shares	Revenue Tickets / from BOR Department	Company
5	Article No.15(a);	Services Order / Contract Agreement	Before execution of Agreement	BOR Department	Contractor
6	Article No.15(b);	Purchase Order	After issuing the PO	BOR Department	Purchase
7	Article No.21;	Lease Agreement / Rent Agreement	Before signing the Rental Agreement	Stamp Paper / City Court (adhesive stamp)	Lessee
8	Article No.27;	Power of Attorney	POA will be given on Stamp Paper	Stamp Paper	Principal
9	Article No.31;	Transfer of Shares	Before transfer of Shares	Revenue Tickets / from BOR Department	Transferee

Penal Provision;

If any instrument is found not duly stamped, the Chief Collector of Stamp may exercise his power under Section 40(b) of the Act and may impose the Penalty up to 10 times of Principal Amount which means 1,000% of the principal duty.

Read more blogs here and to contact FBR click here.

Consultancy

Overview of The Stamp Act 1899

Overview of The Stamp Act 1899