Lawyers' stamp duty predicament: appeal to President

by Sarath Malalasekera

In view of the hardships faced by the lawyers in attesting deeds as a result of the shortage of high value stamps and also as a result of there being no provision to deposit the Stamp Duty in prescribed banks and annexing of certificates of payment in respect of leases and mortgages, the President of the Bar Association of Sri Lanka, Nihal Jayamanne PC, has written to the President who is also the Minister of Finance and Planning, requesting him to intercede and amend the Stamp Act. The reasons for this request were as follows:

"Stamp duty payable in respect of transfers and gifts of immovable property is payable to the Provincial Councils. The stamp duty payable on other instruments such as mortgages and leases have to be paid to the Central Government.

Therefore the provisions with regard to the mode and time of stamping of instruments in respect of transfers and gifts are governed by the Financial Statutes of the Provinces, and in respect of other instruments such as leases and mortgages, the provisions of the Stamp Act applies.

President's attention was drawn to the provisions of Section 14 of the Stamp Act where it is stated that all instruments chargeable with duty must be stamped before or at the time of execution unless express provisions are made to the contrary in the Stamp Act. No express provisions have been made to permit the stamping of documents after the execution of deeds.

President's attention was also drawn to the fact that in the Financial Statute of the Western Province No. 6 of 1990, certain provisions are made with regard to the time and mode of stamping in Chapter XII.

As regards the mode of stamping, there are special provisions enacted in Section 40 (1) to the effect that a certificate of payment of stamp duty to a prescribed bank is available as an alternative to affixing adhesive stamps.

In sub section 2 of Section 40 of the Provincial Statute, specific provision is made to pay the Stamp Duty to a prescribed bank and that on such payment a certificate will be issued, which certificate should be affixed to the deed in lieu of adhesive stamps.

This sub section also provides that, where the certificate cannot be obtained on or before the date of execution, the certificate could be obtained within 7 days of execution.

The Bar Association expressed the view that Section 14 of the Stamp Act should be amended to incorporate these provisions in Section 40 (1) and 40 (2) of the Provincial Statutes, so that the time and mode of payment in respect of leases and mortgages are brought in line with the mode and payment of stamp duty with regard to transfers and gifts.

The Bar Association also suggested that the facility to pay stamp duty to banks should be extended to all branches of the prescribed bank in the entire country in respect of all instruments that have to be stamped and it was also suggested that more than one State Bank be prescribed.

These decisions were made at a meeting held at the BASL office last week at which, Nihal Jayamanne PC, President of the BASL, Nihan Pieris, Chairman of the National Practices Committee and members of the NPC Committee met with Sepala Ratnayake, Snr. Asst. Sec. (Legal) of the Presidential Secretariat.