Maha: Bank guarantees will no longer attract stamp duty as per independent category

Mumbai, July 7 (IANS) 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 under a separate, independent category.

This was done through an amendment to the Maharashtra Stamp Act (1958). The bill, which was presented in the state assembly by Revenue Minister Chandrashekhar Bawankule on Tuesday, was unanimously passed.

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, said Bawankule.

According to the bill, a ‘separate article’ has been included for bank and financial guarantee instruments. Bawankule noted that 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, thereby boosting government revenue.

Meanwhile, Minister Shambhuraj Desai on Tuesday announced in the Legislative Council that a meeting will be convened within 15 days after the assembly session to address the issues raised by members regarding the outstanding dues owed to the Brihanmumbai Municipal Corporation (BMC) by the National Sports Club of India in Worli. The issue was raised by Member Prasad Lad. Member Anil Parab also participated in the discussion.

Desai was speaking in response to the deliberations. He stated that the recommendations made by the Public Accounts Committee (PAC) regarding this matter will be strictly followed. Furthermore, a dedicated committee will be established to investigate the club’s operations and financial transactions. Subsequent action will be taken based on the findings of this inquiry report.

Minister of State for Urban Development Madhuri Misal added that the municipal corporation has previously recovered Rs 66 crore from the institution, along with an additional Rs 11 crore in connection with unauthorised construction.

She noted that the remaining outstanding dues are being recovered in phased installments. Directions will be issued to audit and investigate the institution’s transactions and submit a comprehensive report within three months.

Stringent action will be initiated based on the recommendations of the PAC as well as the findings of the upcoming inquiry report, she assured the House.

–IANS

sj/dan