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Maharashtra hardens stand, issues notices to banks on stamp duty dues

Our Bureau

Mumbai , Nov. 18

SEVERAL banks may have to shell out huge amount as stamp duty dues on sale and purchase of government securities as the Maharashtra Government has issued a 15-day recovery notice to them.

The State Government has also threatened to take action against those that fail to respond and submit the details of payments made within the stipulated time.

Banks have not been paying stamp duty ever since the State Government introduced the new stamp duty structure through an Ordinance in May 2005.

According to bankers, it was not clear whether deals settled through the electronic system can be considered as contracts attracting stamp duty. Besides, 90 per cent trades in government securities were inter-bank, said a dealer.

As per the revised scheme, records of transactions in government securities executed in Maharashtra attract a stamp duty of Rs 50 per every Rs 1 crore or part thereof of the value of securities traded.

Earlier, stamp duty on securities transaction was Rs 1,000 per deal without any ceiling on the value of securities traded, which was paid by brokers.

G-sec trading volume for September was Rs 29,000 crore which was down to Rs 14,000 crore in October due to closure of market for many days.

Industry bodies such as the Indian Banks' Association and the Fixed Income Money Market and Derivatives Association of India have been taking up the stamp duty issue with the State Government and the RBI.

The State Government has asked banks to submit details of transactions in government securities from 1996-97 to 2004-05.

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