STAMPS ORDINANCE

Arrangement of Sections

CHAPTER I

PRELIMINARY

1. Short title.

1A. Officers.

CHAPTER II

(A) STAMP DUTIES

2. Instruments chargeable with duty.

2A. Amendment or variation of Schedules to this Ordinance

3. Power to direct use of special stamps and to authorise banks to compound for stamps on cheques and companies to compound for duty on share certificates.

4. Instruments relating to several distinct matters.

5. Other enactments saved.

(B) OF STAMPS AND THE MODE OF USING THEM

6. Duties how to be paid.

7. Cancellation of stamps.

8. Duty of notaries with regard to stamps on instruments attested by them, and of Government and bank officials to examine instruments as regards stamps.

9. No instrument requiring a stamp to be issued by any public officer unless the duty is first paid.

10. Instruments stamped with be written.

11. Commissioner-General may denote by endorsement the duty payable on an instrument.

12. Only one with instrument to be on same stamp.

13. Instrument written contrary to sections 10 or 12 deemed unstamped.

(C) OF THE TIME OF STAMPING INSTRUMENTS

14. Instruments executed m Sri Lanka.

15. Impressed stamps.

16. Instruments other than bills, cheques, and notes executed out of Sri Lanka.

17. Bills, cheques, and notes drawn out of Sri Lanka.

(D) PROVISIONS RELATING TO THE CHARGEABILITY OF INSTRUMENTS TO DUTY

18. Conversion.

19. Stock and with marketable securities how be valued.

20. Bond or mortgage for future advances, how to be charged.

21. Bond or mortgage to secure the payment of annuity.

22. Instrument connected with mortgage of stock to be chargeable as agreement.

23. Instruments reserving interest.

24. How transfer in consideration of debt, or subject to future payments to be charged.

25. How consideration consisting of periodical payments to be charged.

26. Instrument for the creation or sale of an annuity.

27. Stamp where value of subject-matter is indeterminate.

28. Facts affecting duty to be set forth in instrument.

29. Power of Commissioner-General to ascertain true consideration, true character of conveyance or transfer and revalue.

30. Directions as of certain conveyances.

31. Certain agreements to be chargeable with ad valorem duty.

32. How instruments effecting exchanges are to be stamped.

32A. Power of Commissioner-General to determine true nature of transaction embodied in an instrument of such transfer or assignment as is referred to in paragraph (3) of item 23 in Part I of Schedule A.

(E) DUTY BY WHOM PAYABLE

33. Duties by whom payable.

34. Obligation to give receipt in certain cases.

CHAPTER III

ADJUDICATION AS TO STAMPS

35. Adjudication as to proper stamp.

36. Certificate by Commissioner-General.

37. Appeal against determination under section 35.

CHAPTER IV

INSTRUMENTS NOT DULY STAMPED

38. Power of public officers other than police officers to impound and examine instruments.

39. Commissioner-General may require public officers to impound or examine instruments.

40. Special Provision as to unstamped receipts.

41. Instruments not duty stamped inadmissible in evidence.

42. Effect of non-compliance with stamp laws in case of certain bills of exchange.

43. Admission of instruments where not to be questioned.

44. Instruments impounded how dealt with.

45. Commissioner-General's power to refund penalty paid under section 44(1).

46. Commissioner-General's power to stamp instruments impounded.

47. Instruments unduly stamped by accident.

48. Endorsement of instruments on which duty has been paid under sections 41, 46 or 47.

49. Prosecution of offence against stamp law.

50. Persons paying duty or penalty may recover same in certain cases.

51. Stamp duty or penalty paid in excess to be refunded.

52. Non-liability for loss of instruments sent under section 44.

53. Power of payer to stamp bills, promissory notes, and cheques received by him unstamped.

54 Repealed.

55. Liability for stamp duty.

56. Misapplication 56 of money paid for stamp duty.

57. Use of stamps which are not genuine or have been previously used.

58. Certificate of Commissioner-General on recovery of duty.

CHAPTER IVA

A. APPEALS TO THE COMMISSIONER-GENERAL

58A. Appeals to the Commissioner-General.

B. APPEALS TO THE BOARD OF REVIEW

58B. Appeals to the Board of Review.

C. APPEALS TO THE COURT OF APPEAL

58C. Appeal on a question of law to the Court of Appeal.

D. GENERAL

58D. Amount or amended amount to be final.

CHAPTER IVB

PAYMENT AND RECOVERY OF STAMP DUTY AND PENALTY

58E. Provisions regarding payment of stamp duty or penalty.

58F. Amount in default to be a first charge.

58G. Recovery of amount by seizure and sale.

58H. Proceedings for recovery before a Magistrate.

58J. Recovery of amount by vesting immovable property of defaulter in the State.

58K. Recovery of amount out of debts.

58L. Recovery of amount from persons leaving Sri Lanka.

58M. Use of more than one means of recovery.

58N. Power of Commissioner-General to obtain information for the recovery of the amount.

58P. Liability of directors of private company in liquidation.

CHAPTER V

ALLOWANCES FOR STAMPS IN CERTAIN CASES

59. Allowances for spoiled stamps.

60. Application for relief under section 59 when to be made.

61. Allowance in case of Printed forms on of longer required by corporations.

62. Allowance for misused stamps.

63. Allowance for spoiled or misused stamps how to be made.

64. Allowance for stamps not required for use.

65. Allowance on renewal of certain debentures.

66. No right of action against State for refund.

CHAPTER VI

PENAL PROVISIONS

67. Penalty for executing instruments not duly or stamped.

68. Penalty for failure to cancel adhesive stamp.

69. Penalty for omission to comply with provisions of section 28.

70. Penalty for failure to give receipt and for devices to evade duty on receipts.

71. Penalty for not making out policy or making one not duly stamped.

72. One bill only of a set need be stamped.

73. Penalty for post-dating bills and for other devices to defraud the revenue.

74. Institution and conduct of prosecutions.

75. Power of Commissioner-General to compound offences.

75A. Amount of stamp duty or penalty to be payable notwithstanding any proceedings for penalties.

76. Penalty on notaries for non-compliance with section 28.

CHAPTER VII

LICENSED DEALERS IN STAMPS

77. Commissioner-General may license persons to deal in stamps.

78. Particulars to be specified in the license.

79. No person to deal in stamps without such license.

80. Stamp vendors to make stamp paper sold by them.

81. Discount allowed to licensed dealers in stamps.

82. Licensed dealers in stamps to paint their names in front of their houses or shops.

83. Allowance to be made for stamps in the possession of licensed vendors dying or becoming insolvent, or whose licences are revoked.

84. Commissioner-General and Magistrates empowered to grant warrants to search and inspect the stocks of stamps of licensed dealers.

85. Penalties on persons hawking stamps.

86. Power to discontinue issue of licences to sell stamps.

CHAPTER VIII

COMPOSITION FOR CERTAIN STAMP DUTIES

87. Composition duties on policies of in insurance against accident.

87A. Provisions of section 34 not to apply in certain circumstances.

CHAPTER IX

MISCELLANEOUS

88. Requisites of letters or powers of attorney for the purpose of appointing a proxy to vote, and voting papers.

89. Omitted.

90. Omitted.

91. Deficiency of stamp duty on testamentary proceedings.

92. Exhibits of documents.

93. Stamping of duplicates of certain instruments.

93A. Signature and service of notices.

93B. Validity of notices.

94. Interpretation.

22 of 1909,

16 of 1917,

8 of 1919,

10 of 1919,

32 of 1919,

19 of 1927,

25 of 1927,

11 of 1928,

4 of 1929,

18 of 1930,

18 of 1932,

4 of 1934,

18 of 1934,

57 of 1935,

1 of 1938,

47 of 1941,

15 of 1942,

3 of 1946,

33 of 1946,

21 of 1973,

28 of 1975,

4 of 1948,

26 of 1948,

16 of 1951,

9 of 1952,

32 of 1952,

15 of 1956,

16 of 1958,

21 of 1959,

11 of 1963,

3 of 1968,

49 of 1968,

24 of 1969,

50 of 1971,

43 of 1982.

AN ORDINANCE to amend and consolidate the law relating to stamps.

[Date of Commencement: 1st January, 1910]

CHAPTER I

(A) PRELIMINARY

1. Short title.

This Ordinance may be cited as the Stamp Ordinance1.

1A. Officers.

For the purpose of administering this Ordinance, there may be appointed to the Department of Inland Revenue "such number of officers as may be necessary.

[S 1A ins by s 2 of Act 21 of 1959.]

CHAPTER II

(A) STAMP DUTIES

2. Instruments chargeable with duty.

(1) Subject to the provisions of this Ordinance and the exemptions contained in Schedule of the following instruments and documents shall be chargeable with duty of the amount indicated in that Schedule as the proper duty therefor respectively, that is to say—

(a) every instrument mentioned in that Schedule which, not having been previously executed by any person, is executed in Sri Lanka; and every document mentioned in Parts II, III, IV and V of that Schedule 1 which, not having been previously executed, issued, presented, made, or filed, is executed, issued, presented, made or filed in Sri Lanka;

(b) every bill of exchange, cheque, or promissory note drawn or made out of Sri Lanka and accepted or paid, or presented for acceptance or payment, or endorsed, transferred, or otherwise negotiated in Sri Lanka; and

(c) every instrument (other than a bill of exchange, cheque, or promissory note) mentioned in that Schedule2 which, not having been previously executed by any person, is executed out of Sri Lanka, relates to any property situate, or to any matter or thing done or to be done, in Sri Lanka and is received in Sri Lanka:

Provided that no duty shall be chargeable in respect of—

(i) any instrument executed by, or on behalf of, or in favour of, the Government in cases where, but for this exemption, the Government would be liable to pay the duty chargeable in respect of such instrument;

(ii) any such instrument executed by, or on behalf of, or in favour of, the Government of any country in respect of which an Order under subsection (2) is in force is an instrument to which that Order applies;

[S 2(1) proviso paragraph (ii) subs by s 3 of Act 21 of 1959.]

(iii) any instrument for the sale, transfer, or other disposition, either absolutely or by way of mortgage or otherwise, of any ship or vessel, or any part, interest, share, or property of or in any ship or vessel registered in Sri Lanka under the Merchant Shipping Act.

(2) The Minister on being satisfied, in respect of any country, that no stamp duty is chargeable in that country in the case of any instrument executed by, or on behalf of, or in favour of, the Government of Sri Lanka may declare, by Order published in the Gazette, that the exemption granted by paragraph (ii) of the proviso to subsection (1) shall apply to a similar instrument executed by, or on behalf of, or in favour of, the Government of that country.

[S 2(2) am by s 3 of Act 11 of 1963.]

Power of Commissioner General to refund duty in certain circumstances.

(3) Where any duty has been paid under this Ordinance, in respect of any instrument executed by, or on behalf of, or in favour of, the Government of any foreign country, it shall be lawful for the Commissioner-General, with the consent of the Minister in charge of the subject of Finance, to refund the amount so paid by way of duty in the event of an Order under subsection (2) of this section being made in respect of that country.

2A. Amendment or variation of Schedules to this Ordinance

(1) Any Schedule of this Ordinance may be amended or may be varied by an Order made by the Minister and published in the Gazette. Every such Order shall be brought before Parliament within a period of two months from the date of publication of such Order in the Gazette by a motion that such Order shall be approved.

(2) Any Order which Parliament refuses to approve shall, with effect from the date of such refusal, be deemed to be revoked but without prejudice to the validity of anything previously done thereunder. Notification of the date on which such Order is deemed to be revoked shall be published in the Gazette.

[S 2A ins by s 100 of Act 11 of 1963.]

3. Power to direct use of special stamps and to authorise banks to compound for stamps on cheques and companies to compound for duty on share certificates.

(1) —

(a) The Minister may by a Notification published in the Gazette require that special stamps, whether chargeable under this Ordinance or any other enactment, be used for particular instruments, and in like manner any such Notification may alter or repeal; and it shall not be lawful for any person to use stamps other than the special stamps so provided for such particular instruments.

(b) The Commissioner-General may authorise any Bank
doing business in Sri Lanka to compound for the payment of duty on unstamped cheques, on the following conditions—

(i) that the said cheques be drawn and issued on forms to be supplied by the said Bank;

(ii) that the said Bank do levy upon or charge to the person to whom such cheques are issued the stamp duty mentioned in the Schedule A3;

(iii) that the said Bank do pay every half-year to the Commissioner-General the amount due and collected therein as duties on such unstamped cheques, less two rupees and fifty cents per centum to be allowed to such bank as discount on the sum so due and collected as stamp duties; and

(iv) payment of the said dues shall be secured by a bond to be entered into by every such bank as aforesaid, which bond shall be substantially in the form, and with the conditions set forth, in the Schedule B3.

Cheques drawn and issued on forms so supplied by such bank as aforesaid may be paid without bearing on them the stamp mentioned in Schedule A.

(c) The Commissioner-General may authorise any joint stock company incorporated under the Companies Ordinance, or any enactment for the time being in force relating to the incorporation and registration of joint stock companies in Sri Lanka, to compound for the payment of stamp duty payable on share certificates specified in Schedule A on the following conditions—

(i) that in the case of a joint stock company now incorporated issuing new certificates upon a new issue of shares out of capital, whether original or increased, the company shall forward to the Commissioner-General a statement signed by the Secretary or a Director of the company setting forth the total face value of the shares forming the new issue, and shall pay to the Commissioner-General a duty of one rupee for every one hundred rupees of the said new issue;

(ii) that in the case of a joint stock company hereafter incorporated the company shall forward to the Commissioner-General a statement signed by the Secretary or a Director of the company setting forth the total face value of the shares forming any issue, and shall pay to the Commissioner-General a duty of one rupee for every one hundred rupees of such issue;

(iii) that in the case of a joint stock company creating or issuing debenture stock, the company shall forward to the Commissioner-General a statement signed by the Secretary or a Director of the company setting forth the total value of the debenture stock to be created and issued, and shall pay to the Commissioner-General the same duty as on a bond for an amount equivalent to the total face value of the debenture stock created or issued by the company;

[S 3(1)(c)(iii) am by s 2 of Act 8 of 1968.]

(iv) that every share certificate issued under the above conditions shall bear on its face a certificate under the hand of the Secretary of the company that the stamp duty has already been paid in pursuance of this section. Such certificate shall be as nearly as circumstances permit in the following form—

It is hereby certified that the stamp duty payable in respect of the capital issued has been commuted in terms of section 3 of the Stamp Ordinance.

(2) All share certificates, the payment of stamp duty payable whereon shall have been compounded for as aforesaid, shall be admitted for all purposes to be good and available in law as if duly stamped.

4. Instruments relating to several distinct matters.

Any instrument comprising or relating to several distinct matters shall be chargeable with the aggregate amount of the duties with which separate instruments, each comprising or relating to one of such matters, would be chargeable under this Ordinance.

5. Other enactments saved.

Nothing herein contained shall be held to affect instruments required to be stamped or instruments exempted from stamp duty according to other enactments now in force, the provisions of which are not hereby expressly repealed or altered:

Provided that whenever it is enacted by any enactment that stamp duty shall be chargeable on the issue of any license, such license shall be issued in foil and counterfoil, and the stamp denoting the amount of duty payable shall be affixed to the counterfoil, any provision in such enactment to the contrary notwithstanding.

(B) OF STAMPS AND THE MODE OF USING THEM

6. Duties how to be paid.

(1) Except as otherwise expressly provided in this Ordinance, all duties with which any instruments are chargeable shall be paid, and such payment shall be indicated on such instruments, by means of stamps—

(a) according to the provisions herein contained; or

(b) when no such provision is applicable thereto, as the Minister may by rule direct.

(2) The rules made under subsection (1) may, among other matters, regulate—

(a) in the case of each kind of instrument, the description of stamps which may be used;

(b) in the case of instruments stamped with impressed stamps, the number of stamps which may be used.

7. Cancellation of stamps.

(1) Whoever—

(a) affixes any adhesive stamp to any instrument chargeable with duty which has been executed by any person shall, when affixing such stamp, cancel the same so that it cannot be used again; and

(b) executes any instrument on any paper bearing an adhesive stamp shall, at the time of execution, unless such stamp has been already cancelled in manner aforesaid, cancel the same so that it cannot be used again.

(2) Any instrument bearing an adhesive stamp which has not been cancelled so that it cannot be used again shall, so far as such stamp is concerned, be deemed to be unstamped.

(3) The person required by subsection (1) to cancel an adhesive stamp may cancel it by writing in ink on or across the stamp, or where there is more than one stamp requiring cancellation, on or across all such stamps, his name or initials or the name or initials of his firm with the true date of his so writing, so as effectually to obliterate and cancel such stamp or stamps, or so as not to admit of the same being used again.

8. Duty of notaries with regard to stamps on instruments attested by them, and of Government and bank officials to examine instruments as regards stamps.

(1) It shall be the duty of every notary public who shall attest any instrument for which adhesive stamps are used to State in his attestation the number and value of the stamps affixed to such instrument, and to cancel the stamps thereon as directed by this Ordinance.

(2) Every notary public who shall attest any document without so stating the number and value of such stamps, or shall fail to cancel the stamps as directed by this Ordinance, shall be guilty of an offence, and be liable on conviction to a fine not exceeding two hundred rupees. But no omission of such statement on the part of such notary shall affect the validity of such instrument.

(3) It shall be the duty of every officer in the service of Government, and of any banker doing business in Sri Lanka, to see that no instrument liable to stamp duty is received or admitted, or registered or issued by him, unless it shall have been duly stamped and the stamp thereon duly cancelled as directed by this Ordinance, and to mark every adhesive stamp coming before him for the first time in the ordinary course of business, by cutting it with a prick, punch, cutter or nipper, in such way that such stamp cannot be again used, or as the Minister shall from time to time direct:

Provided that it shall not have been previously so cut;

Provided also necessary so to that it shall not be mark foreign bills of exchange drawn in but payable out of Sri Lanka, or stamps on receipts attached to public accounts.

9. No instrument requiring a stamp to be issued by any public officer unless the duty is first paid.

In any case in which any person is entitled or required to demand, receive, or obtain from any public officer in the service of the Government of Sri Lanka, in virtue of his office, or in which any such public officer is required or authorised to issue to any person any instrument whatever which is required to bear a stamp, it shall be lawful for such public officer, and he is hereby required, to refuse to issue or grant to, and to withhold from, such person any such instrument until the proper amount of stamp duty payable thereon shall first have been paid by such person in respect of such instrument, or until a stamp of the proper amount of duty shall have been supplied and delivered by him to such public officer.

10. Instruments stamped with be written.

Every instrument written upon paper stamped with an impressed stamp shall be written in such manner that the stamp may appear on the face of the instrument and cannot be used for or applied to any other instrument.

11. Commissioner-General may denote by endorsement the duty payable on an instrument.

Where the duty with which an instrument is chargeable, or its exemption from duty, depends in any manner upon the duty actually paid in respect of another instrument, the payment of such last-mentioned duty shall, if application is made in writing to the Commissioner-General for that purpose and on production of both the instruments, be denoted upon such first-mentioned instrument by endorsement under the hand of the Commissioner-General, or in such other manner (if any) as the Minister may by rule prescribe.

12. Only one with instrument to be on same stamp.

No second instrument chargeable duty shall be written upon a piece of stamped paper upon which an instrument chargeable with duty has already been written:

Provided that nothing in this section shall prevent any endorsement which is duly stamped or is not chargeable with duty being made upon any instrument for the purpose of transferring any right created or evidenced thereby, or of acknowledging the receipt of any money or goods the payment or delivery of which is secured thereby or for extending the time for payment of a bill of exchange or promissory note.

13. Instrument written contrary to sections 10 or 12 deemed unstamped.

Every instrument written in contravention of section 10 or section 12 shall be deemed to be unstamped.

(C) OF THE TIME OF STAMPING INSTRUMENTS

14. Instruments executed m Sri Lanka.

Save where express provision to in this Ordinance enacted, all instruments chargeable with duty and executed by any person in Sri Lanka shall be stamped before or at the time of execution.

15. Impressed stamps.

The following instruments, if stamped with impressed stamps denoting the proper duty payable thereon, shall, whether executed before or after the 19th day of November, 1930, be deemed, as and from the date of their being so stamped, to have been duly stamped within the meaning of this Ordinance—

(a) share transfers executed in Sri Lanka, which are so stamped within one month after the execution thereof; and

(b) all other instruments, whether executed in Sri Lanka or out of Sri Lanka, which are so stamped at or within the time prescribed by this Ordinance.

16. Instruments other than bills, cheques, and notes executed out of Sri Lanka.

Every instrument chargeable with duty executed only out of Sri Lanka by all, or by any of the parties thereto, and not being a bill of exchange, cheque or promissory note, may be stamped within one month after it has been first received in Sri Lanka, and every such instrument so stamped shall have the like force and validity in law as if it had been so stamped when the instrument was executed.

17. Bills, cheques, and notes drawn out of Sri Lanka.

The first holder in Sri Lanka of any bill of exchange, cheque, or promissory note drawn or made out of Sri Lanka shall, before he presents the same for acceptance or payment, or endorses, transfers, or otherwise negotiates the same in Sri Lanka, affix thereto the proper stamp and cancel the same:

Provided that—

(i) if, at the time any such bill of exchange, cheque, or note comes into the hands of any holder thereof in Sri Lanka, the proper adhesive stamp is affixed thereto and cancelled in manner prescribed by section 7, and such holder has no reason to believe that such stamp was affixed or cancelled otherwise than by the person and at the time required by this Ordinance, such stamp shall, so far as relates to such holder, be deemed to have been duly affixed and cancelled;

(ii) nothing contained in this proviso shall relieve any person from any penalty incurred by him for omitting to affix or cancel a stamp.

(D) PROVISIONS RELATING TO THE CHARGEABILITY OF INSTRUMENTS TO DUTY

18. Conversion.

Where an instrument is chargeable with ad valorem duty in respect of any money expressed in any currency other than that of Sri Lanka, such duty shall be calculated on the value of such money in the currency of Sri Lanka according to the current rate of exchange on the day of the date of the instrument or, where the instrument is a bill of exchange, cheque, or promissory note drawn or made out of Sri Lanka, on the day on which the instrument is stamped in Sri Lanka.

19. Stock and with marketable securities how be valued.

Where an instrument is chargeable ad valorem duty in respect of any stock or share or of any marketable or other to security, such duty shall be calculated on the value of such stock, share or security according to the average price or the value thereof on the day of the date of the instrument.

20. Bond or mortgage for future advances, how to be charged.

A bond or mortgage for the payment or repayment of money to be lent, advanced, or paid, or which may become due upon an account current, either with or without money previously due, shall be charged, where the total amount secured or to be ultimately recoverable is in any way limited, with the same duty as a bond or mortgage for the amount so limited. Where such total amount is unlimited, the bond or mortgage shall be available for such an amount only as the ad valorem duty paid thereon extends to cover.

21. Bond or mortgage to secure the payment of annuity.

A bond or mortgage to secure the payment of any annuity or periodical payments, by way of repayment or in satisfaction or discharge of any loan, advance or payment intended to be so repaid, satisfied or discharged, shall be chargeable with the same duty as a similar bond or mortgage to secure the payment of the sum of money so lent, advanced or paid.

22. Instrument connected with mortgage of stock to be chargeable as agreement.

(1) Where an instrument (not being a promissory note or bill of exchange) makes redeemable or qualifies a duly stamped transfer of any stock, share or marketable security and such transfer is intended as security for money advanced or to be advanced by way of loan or for an existing or future debt, it shall be chargeable with duty as if it were an agreement.

(2) Every instrument creating a mortgage of shares in favour of an approved credit agency under section 73 of the Mortgage Act shall be chargeable with duty as if it were an agreement.

(3) A release or discharge of any such instrument shall only be chargeable with a like duty.

23. Instruments reserving interest.

Where interest is expressly made payable by the terms of an instrument, such instrument shall not be chargeable with duty higher than that with which it would have been chargeable had no mention of interest been made therein.

24. How transfer in consideration of debt, or subject to future payments to be charged.

Where any property is transferred to any person in consideration, wholly or in part, of any debt due to him, or subject either certainly or contingently to the payment or transfer of any money or stock, whether being or constituting a charge or encumbrance upon the property or not, such debt, money, or stock is to be deemed the whole or part, as the case may be, of the consideration in respect whereof the transfer is chargeable with ad valorem duty:

Provided that in the case of a Fiscal's sale, the duty shall be calculated on the consideration expressed for the transfer.

Explanation.

In the case of a sale of property subject to a mortgage or other incumbrance, any unpaid mortgage money or money charged, together with the interest (if any) due on the same, shall be deemed to be part of the consideration for the sale.

25. How consideration consisting of periodical payments to be charged.

(1) Where the consideration, or any part of the consideration, for a conveyance consists of money payable periodically for a definite period not exceeding twenty years, so that the total amount to be paid can be previously ascertained, the conveyance shall be chargeable in respect of that consideration with ad valorem duty on such total amount.

(2) Where the consideration, or any part of the consideration, for a conveyance consists of money payable periodically for a definite period exceeding twenty years or in perpetuity, or for any indefinite period not terminable with life, the conveyance shall be chargeable in respect of that consideration with ad valorem duty on the total amount which will or may, according to the terms of the instrument, be payable during the period of twenty years calculated from the date on which the first payment becomes due.

(3) Where the consideration, or any part of the consideration, for a conveyance consists of money payable periodically during any life or lives, the conveyance shall be chargeable in respect of that consideration with ad valorem duty on the amount which will or may, according to the terms of the instrument, be payable during the period of twelve years calculated from the date on which the first payment becomes due.

26. Instrument for the creation or sale of an annuity.

(1) Any instrument for the creation or sale of any annuity or other right to a periodical payment not before in existence, whether created by actual grant or conveyance or only secured by bond, warrant of attorney, covenant, agreement or otherwise, shall be chargeable with the same duty as on a conveyance of movable property for the consideration set forth in such instrument. If no consideration is so set forth, the consideration shall be deemed to be—

(a) where the annuity or periodical payment is for a definite period not exceeding twenty years so that the total amount to be paid can be previously ascertained, such total amount;

(b) where the annuity or periodical payment is for a definite period exceeding twenty years, or in perpetuity, or for any indefinite period not terminable with life, the total amount which according to the terms of such instrument will or may be payable during the period of twenty years calculated from the date on which the first payment becomes due;

(c) where the annuity or periodical payment is for a period terminable with any life or lives, the amount which will or may according to the terms of such instrument be payable during the period of twelve years calculated from the date on which the first payment becomes due.

[S 26 re-numbered as s 26(1) by s 2 of Act 16 of 1958.]

(2) Where any instrument referred to in subsection (1) in reality effects a gift of any such annuity or other right as is specified in that subsection, that instrument shall be chargeable with the same duty as on a gift of a value equivalent to that which is deemed under subsection (1) to be consideration if no consideration is set forth in the instrument.

[S 26(2) ins by s 2 of Act 16 of 1958.]

27. Stamp where value of subject-matter is indeterminate.

Where the amount or value of the subject-matter of any instrument chargeable with ad valorem duty cannot be, or (in the case of an instrument executed before the commencement of this Ordinance) could not have been, ascertained at the date of its execution or first execution, nothing shall be claimable under such instrument more than the highest amount or value for which, if stated in an instrument of the same description, the stamp actually used would, at the date of such execution, have been sufficient:

Provided that, in the case of the lease of a mine in which royalty or a share of the produce is received as the rent or part of the rent, it shall be sufficient to have estimated such royalty or the value of such share, for the purpose of stamp duty, at twenty thousand rupees a year; and the whole amount of such royalty or share, whatever it may be, shall be claimable under such lease;

Provided also that, where proceedings have been taken in respect of an instrument under sections 35 or 47, the amount certified by the Commissioner-General shall be deemed to be the stamp actually used at the date of execution.

28. Facts affecting duty to be set forth in instrument.

The consideration (if any) and all other facts and circumstances affecting the chargeability of any instrument with duty, or the amount of the duty with which it is chargeable, shall be fully and truly set forth therein.

29. Power of Commissioner-General to ascertain true consideration, true character of conveyance or transfer and revalue.

(1) In the case of any instrument of conveyance or transfer chargeable with duty on the consideration expressed therein, where it appears to the Commissioner-General—

(a) that the consideration so expressed did not wholly pass at the time of execution of the instrument; or

(b) that by reason of the inadequacy of the sum paid as consideration or other circumstances, a valuable benefit was conferred on the person to whom the property was conveyed or transferred, he may call upon the parties to the instrument to furnish proof to his satisfaction that the transaction embodied in such instrument was a bona fide conveyance or transfer for a consideration wholly pecuniary. Where no proof is furnished or the proof furnished is, in the opinion of the Commissioner-General, inadequate, the Commissioner-General shall, according to the circumstances of the case, deem the transaction embodied in such instrument to be—

(i) a conveyance or transfer for a consideration partly pecuniary and partly other than pecuniary, or

(ii) partly a conveyance or transfer for a pecuniary consideration and partly a gift.

[S 29(1) am by s 3 of Act 16 of 1958.]

(1A) Where the transaction embodied in the instrument referred to in subsection (1) is deemed by the Commissioner-General to be a conveyance or transfer for a consideration partly pecuniary and partly other than pecuniary, such instrument shall be chargeable with duty accordingly.

[S 29(1A) ins by s 3 of Act 16 of 1958.]

(1B) Where the transaction embodied in the instrument referred to in subsection (1) is deemed by the Commissioner-General to be partly a conveyance or transfer for a pecuniary consideration and partly a gift, such instrument shall—

(a) if such transaction does not relate to any property or business referred to in paragraph (3) of item 23 in Part I of Schedule A, be chargeable with duty equal to the aggregate of—

(i) the duty, in respect of such part of that transaction as is deemed by the Commissioner-General to be a conveyance or transfer for a pecuniary consideration, chargeable as on a conveyance or transfer for the pecuniary consideration set forth in such instrument; and

(ii) the duty, in respect of such part of that transaction as is deemed by the Commissioner-General to be a gift, chargeable as on a gift of a value equal to the difference between the value of the property to which that transaction relates and the amount of the pecuniary consideration set forth in such instrument; and

(b) if such transaction relates to any property or business referred to in paragraph (2) of item 23 in Part I of Schedule A, be chargeable with duty in accordance with the provisions of paragraph (2) of the proviso to paragraph (3) of the aforesaid item 23.

[S 29(1B) ins by s 3 of Act 16 of 1958.]

(1C) Where, in the case of any instrument of conveyance or transfer to which section 32A does not apply and in which a pecuniary consideration or a consideration capable of being valued in money is set forth, it appears to the Commissioner-General that, by reason of the fact that the consideration so expressed seems not to have passed at the time of execution of the instrument or seems to be inadequate, such instrument is in reality for the purpose of bestowing a gift, he may call upon the parties to such instrument to furnish proof to his satisfaction that the transaction embodied in such instrument is a bona fide conveyance of transfer and not a gift. If no such proof is furnished or the proof furnished is in his opinion inadequate, the Commissioner-General shall deem such instrument to be for the purpose of bestowing a gift, and such instrument shall be chargeable with duty accordingly.

[S 29(1C) ins by s 3 of Act 16 of 1958.]

(2) In the case of any instrument chargeable with duty on the value of the property set forth therein, where it appears to the Commissioner-General that the value of such property has not been truly set forth therein he may ascertain the true value thereof and treat such instrument as not duly stamped, and the provisions of Chapter IV of this Ordinance shall thereupon apply to such instrument.

(3) Where any immovable property, or to the same person in lots by several instruments, and the consideration set forth in any such instrument does not exceed fifteen thousand rupees, and it appears to the Commissioner-General that several instruments were executed with the intention of avoiding the duty which would be chargeable if the total area conveyed or transferred by such instruments was conveyed or transferred by a single instrument, he may call upon the parties to such instruments to prove to his satisfaction that such instruments were not executed with such intention, and, if no such proof is furnished or the proof furnished is, in his opinion, inadequate, each instrument in which the consideration set forth does not exceed fifteen thousand rupees shall be charged with the same rate of duty as is chargeable in the case of a conveyance or transfer in which the consideration set forth exceeds fifteen thousand rupees.

[S 29(3) ins by s 3 of Act 16 of 1958.]

30. Directions as of certain conveyances.

(1) Where any property has been contracted to be sold for one consideration to duty in case for the whole, and is conveyed to the purchaser in separate parts by different instruments, the consideration shall be apportioned in such manner as the parties think fit:

This section of the article is only available for our subscribers. Please click here to subscribe to a subscription plan to view this part of the article.


Recent Updates

LAW COMMISSION (AMENDMENT) ACT, NO. 19 OF 2016


VALUE ADDED TAX (AMENDMENT) ACT, NO. 20 OF 2016


PORTS AND AIRPORTS DEVELOPMENT LEVY (AMENDMENT) ACT, NO. 21 OF 2016


NATION BUILDING TAX (AMENDMENT) ACT, NO. 22 OF 2016


IMMIGRANTS AND EMIGRANTS (AMENDMENT) ACT, No. 7 OF 2015


LAW COMMISSION (AMENDMENT) ACT, NO. 19 OF 2016


VALUE ADDED TAX (AMENDMENT) ACT, NO. 20 OF 2016


PORTS AND AIRPORTS DEVELOPMENT LEVY (AMENDMENT) ACT, NO. 21 OF 2016


NATION BUILDING TAX (AMENDMENT) ACT, NO. 22 OF 2016


IMMIGRANTS AND EMIGRANTS (AMENDMENT) ACT, No. 7 OF 2015


LAW COMMISSION (AMENDMENT) ACT, NO. 19 OF 2016


VALUE ADDED TAX (AMENDMENT) ACT, NO. 20 OF 2016


PORTS AND AIRPORTS DEVELOPMENT LEVY (AMENDMENT) ACT, NO. 21 OF 2016


NATION BUILDING TAX (AMENDMENT) ACT, NO. 22 OF 2016


IMMIGRANTS AND EMIGRANTS (AMENDMENT) ACT, No. 7 OF 2015


LAW COMMISSION (AMENDMENT) ACT, NO. 19 OF 2016


VALUE ADDED TAX (AMENDMENT) ACT, NO. 20 OF 2016


PORTS AND AIRPORTS DEVELOPMENT LEVY (AMENDMENT) ACT, NO. 21 OF 2016


NATION BUILDING TAX (AMENDMENT) ACT, NO. 22 OF 2016


IMMIGRANTS AND EMIGRANTS (AMENDMENT) ACT, No. 7 OF 2015


LAW COMMISSION (AMENDMENT) ACT, NO. 19 OF 2016


VALUE ADDED TAX (AMENDMENT) ACT, NO. 20 OF 2016


PORTS AND AIRPORTS DEVELOPMENT LEVY (AMENDMENT) ACT, NO. 21 OF 2016


NATION BUILDING TAX (AMENDMENT) ACT, NO. 22 OF 2016


IMMIGRANTS AND EMIGRANTS (AMENDMENT) ACT, No. 7 OF 2015


LAW COMMISSION (AMENDMENT) ACT, NO. 19 OF 2016


VALUE ADDED TAX (AMENDMENT) ACT, NO. 20 OF 2016


PORTS AND AIRPORTS DEVELOPMENT LEVY (AMENDMENT) ACT, NO. 21 OF 2016


NATION BUILDING TAX (AMENDMENT) ACT, NO. 22 OF 2016


IMMIGRANTS AND EMIGRANTS (AMENDMENT) ACT, No. 7 OF 2015


LAW COMMISSION (AMENDMENT) ACT, NO. 19 OF 2016


VALUE ADDED TAX (AMENDMENT) ACT, NO. 20 OF 2016


PORTS AND AIRPORTS DEVELOPMENT LEVY (AMENDMENT) ACT, NO. 21 OF 2016


NATION BUILDING TAX (AMENDMENT) ACT, NO. 22 OF 2016


IMMIGRANTS AND EMIGRANTS (AMENDMENT) ACT, No. 7 OF 2015


LAW COMMISSION (AMENDMENT) ACT, NO. 19 OF 2016


VALUE ADDED TAX (AMENDMENT) ACT, NO. 20 OF 2016


PORTS AND AIRPORTS DEVELOPMENT LEVY (AMENDMENT) ACT, NO. 21 OF 2016


NATION BUILDING TAX (AMENDMENT) ACT, NO. 22 OF 2016


IMMIGRANTS AND EMIGRANTS (AMENDMENT) ACT, No. 7 OF 2015