Many companies still franking documents at old rates
Undervaluation of stamp duty by companies that have installed franking machines for their captive use has come to the notice of the Department of Stamps and Registration with many companies still franking documents at old stamp rates.
While the stamp duty rates were hiked from Rs. 50 for a general agreement paper to Rs. 200 with effect from April 1, 2010, many companies, the department has been informed, were still processing these documents with Rs. 50 fee only.
This undervaluation may have cost the State exchequer several crores, sources told The Hindu.
About 126 licences for installation of franking machines in top information technology companies, banks, financial institutions, insurance companies and others for their captive use have been issued by the department across the State.
“We received information about the continued undervaluation of stamp duty by those who have installed franking machines. The district registrars have now been instructed by the office of the Inspector-General of Registration and Commissioner of Stamps to inspect the franking machines installed for captive use,” sources in the department said.
The undervaluation had not been noticed immediately after the revision on April 1, 2010 as they are non-registrable documents, and were found out only recently, the sources said.
A senior department official said that most of these undervaluations were not deliberate. “The companies were referring to the old The Karnataka Stamp Act 1957, and had not kept pace with the amendments.”
According to sources while about 10 lakh documents are registered across the State, officials estimate that about 30 lakh non-registrable documents are generated. “Undervaluation of the stamp duty in non-registrable documents could run into several crores.”
Interestingly, this lack of awareness has also resulted in collection of excess stamp duty by a Tamil Nadu-based bank from its customers as the bank was following the stamp duty rate prevailing in Tamil Nadu, where it is slightly higher for certain documents.
Meanwhile, district registrars, “re-filling” the franking machine according to the company's needs, have been directed to create awareness among users to refer to the updated Act.