COMMERCIAL TAXES AND REGISTRATION DEPARTMENT DEMAND NO.11 STAMPS AND REGISTRATION POLICY NOTE

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1 COMMERCIAL TAXES AND REGISTRATION DEPARTMENT DEMAND NO.11 STAMPS AND REGISTRATION POLICY NOTE Preamble Purchase of immovable property is a dream for every one, as sung by Mahakavi Bharathiar and when this dream comes true, it has to be secured legally. The prime objective of the Registration Department is to give legal status to such transactions involving immovable properties and the department aims at providing efficient and hassle free service to the public approaching the department. While registering the documents involving transaction of immovable properties, stamp duty and registration fee are levied through which a sizeable income is accrued to the State's coffer. The Registration Department, being one of the oldest departments in the State, is the third highest revenue earning department to the State. During the year the department earned Rs crores. It is an astonishing fact that the department which was commissioned in the year 1864 earned a revenue of Rs.1,42,871 in the first year of its inception (i.e.) and has now grown up as one of the primary revenue earning departments with a whopping revenue yield of Rs crores in The revenue earned by the department has shown a steady increase in the past 5 years. But due to the global economic crisis and the consequent financial melt down, the revenue of the department has dipped a little bit during the year The details of the documents registered and the revenue earned by the department during the past 5 years are as follows:

2 2 Year No. of documents registered Percentage of increase Revenue collected (Rs. in crores) Percentage of increase (Upto ) % % % % % % % % % (-)3.14% STATUTORY OBLIGATIONS The Constitution of India enunciates that no tax or duty shall be levied without due authority of law. Collection of stamp duty, registration fee etc., are governed by the following Acts and the department administers the following Acts: 1. The Indian Stamp Act, 1899 (Central Act II / 1899) 2. The Registration Act, 1908 (Central Act XVI / 1908) 3. The Tamil Nadu Non-Trading Companies Act, 1972 (Tamil Nadu Act 16/1972) 4. The Tamil Nadu Societies Registration Act, 1975 (Tamil Nadu Act 27 / 1975) 5. The Chit Funds Act, 1982 (Central Act 40/1982) ANCILLARY FUNCTIONS Though the primary aim of the department is to register documents and earn revenue by way of collection of stamp duty and registration fee, the department also plays a vital role in regularizing the marital status of the Public Marriages held under the following Acts are registered by the department. 1. Indian Christian Marriage Act, 1872 (Central Act 15/1872) 2. The Births, Deaths and Marriages Act, 1886 (Central Act 6/1886)

3 3 3. The Parsi Marriage and Divorce Act, 1932 (Central Act 3/1932) 4. The Special Marriage Act, 1952 (Central Act 43/1954) 5. The Hindu Marriage Act, 1955 (Central Act 25/1955) The officials of the department are also empowered to discharge certain limited functions under the following Acts: 1. The Indian Partnership Act, 1932 (Central Act 9/1932) 2. Dowry Prohibition Act, 1961 (Central Act 28/1961) 3. Births and Deaths Act, 1969 (Central Act 18/1969) ADMINSTRATIVE SET UP OF THE DEPARTMENT Inspector General of Registration is the head of the department. The various Acts administered by the department give various legal status to the post of Inspector General of Registration and the Chief Controlling Revenue Authority under the Indian Stamp Act, 1899, Registrar under the Chit Funds Act, 1982, Tamil Nadu Societies Registration Act, 1975 are a few to name. Apart from this, he is the appellate authority against the orders passed by the District Revenue Officer (Stamps) / Special Deputy Collector (Stamps) in determining the market value under section 47-A of the Indian Stamp Act, He can also review the orders passed by them. To deliver the above said statutory functions, the Inspector General of Registration is assisted by the following officials in the head quarters. 1. Additional Inspector General of Registration (Stamps and Registration) 2. Additional Inspector General of Registration (Guidelines) 3. Additional Inspector General of Registration (intelligence) 4. Additional Registrar of Chits

4 4 5. Personal Assistant (General) 6. District Registrar (Guidelines) 7. District Registrar (Inspection) 8. Personal Assistant (Chits) 9. Accounts Officer With a view to effectively administer the department, it has been divided into 9 Zones and 50 Registration Districts. ZONAL OFFICES Deputy Inspector General of Registration is the zonal head and the zonal head quarters are at Chennai, Vellore, Cuddalore, Thanjavur, Tiruchirappalli, Madurai, Tirunelveli, Salem and Coimbatore. Administration of the entire zone, conducting surprise inspections and enquiries are the prime functions of the Deputy Inspector General of Registration apart from being the Joint Registrar of Chits under the Chit Funds Act, 1982 and appellate authority against the orders passed by the District Registrars in the appointment of stamp vendors. To assist the Deputy Inspectors General of Registration, there are five units of Regional Assistant Inspectors General of Registration at Chennai, Madurai, Tiruchirappalli, Coimbatore and Tirunelveli. Conducting of surprise inspection of sub-registrar offices and test check on the audit done by the District Registrar (Audit) are some of their important functions. DISTRICT OFFICES For the sake of administrative convenience, the entire State has been divided into 50 Registration Districts each under the control of a District Registrar(Administration). Considering the heavy work load in the registration districts of Chennai North, Chennai

5 5 Central, Chennai South, Vellore, Tiruchirappalli, Madurai North, Madurai South, Tirunelveli, Salem East, Salem West, Erode, Coimbatore and Tiruppur, the District Registrar posts in these districts have been upgraded to that of Assistant Inspector General of Registration. The District Registrars are the Registrar of Societies, Deputy Registrar of Chits, Registrar of Marriages, Registrar of Firms and appointing authority for the stamp vendors. Apart from this, there are 45 audit units each headed by a District Registrar(Audit) to conduct cent per cent audit on the documents registered. They make a thorough scrutiny of the documents registered to detect undervaluation, if any. SUB-REGISTRAR OFFICES The grass root level offices of the Registration Department is the Sub-Registrar Offices, where the public approach for registration of their documents and other needs. Considering the significance of these offices, they are located at strategic points and there are 568 offices in the State. Apart from registration of documents, registration of Hindu marriages and Special marriages also take place in these offices. The Sub-Registrars also act as Assistant Registrars under the Chit Funds Act, REGISTRATION TRAINING INSTITUTE There is a training institute in Chennai to impart training to the officials in the various Acts and Rules administered by the department. A Deputy Inspector General of Registration has been posted as Director of the institute and there are two lecturers, one in the cadre of Assistant Inspector General of Registration and another in the cadre of District Registrar. Training on I.T enabled operations is also given here. INTELLIGENCE CELL While registering documents relating to transfer of immovable properties including buildings, stamp duty is payable on the building portion also. To check whether there is any suppression of buildings in the registered documents an intelligence cell has been

6 6 constituted with 8 District Registrars, 4 Sub-Registrars and 2 Assistant Executive Engineers. The cell is headed by an Additional Inspector General of Registration. To enable speedy return of documents, the registering officers have been instructed to take up field inspection to determine the value of the buildings involved in the transaction. VIGILANCE CELL A Vigilance cell consisting of an Assistant Inspector General of Registration and a Sub-Registrar is functioning in the department to conduct enquiries on the complaints received from the public against the personnel of the department. DISTRICT REVENUE OFFICER (STAMPS) / SPECIAL DEPUTY COLLECTORS (STAMPS) Indian Stamp Act, 1899 provides for levy of stamp duty on the market value of the properties which is the subject matter of transaction. To have a fair idea on the market value of the properties, all the registering officers have been provided with Guideline Value Registers, villagewise. On occasions where the registrants fail to adopt the guideline value as the basis for payment of stamp duty, the registering officers after registering the instruments refer the same to the District Revenue Officer (Stamps)/Special Deputy Collector (Stamps), as the case may be under section 47-A(1) of the Indian Stamp Act, 1899, for determination of market value and the proper duty payable thereon. The District Revenue Officers (Stamps) at Chennai and Coimbatore and the Special Deputy Collectors at Vellore, Cuddalore, Thanjavur, Tiruchirappalli, Madurai, Tirunelveli, Virudunagar, Tuticorin and Salem discharge the function of determination of market value and the proper duty payable on the instruments. AMENDMENTS ON THE ANVIL a) It has been proposed to make the registration of instruments of power of attorney compulsory and also to provide for the registration of these instruments only in the jurisdictional sub-registrar office where the property is situated and necessary amendment to

7 7 the Registration Act, 1908, is to be made shortly. It is expected that such a move will curb unlawful activities under the guise of power of attorney. b) In order to set right the legal tangles that arise due to the referral of instruments under section 47A-1 of the Indian Stamp Act, 1899, it has been decided to constitute statutory committees for determination of guideline value and to give statutory backing to the guideline value. The amendment made to section 47A of the Indian Stamp Act, 1899, to give effect to the above decision is to be brought into force shortly. INFRASTRUCTURE INITIATIVES Registration Department is one of the biggest departments in the State and it has more than 600 offices spread through out the State. Nearly 50% of these offices function in private buildings and the Government is considering creating suitable infrastructure for these offices and new buildings have been constructed for 35 sub-registrar offices during the period 2006 to Construction of more buildings for the offices of the department is under way. A proposal has been submitted to the 13th Finance Commission to sanction a sum of Rs.237 crores as grant for developing the infrastructure of the department. STAMP PAPERS PROCUREMENT AND SUPPLY According to the Indian Stamp Act, 1899, stamp duty has to be paid by means of special adhesive stamps and non-judicial stamp papers. The non-judicial stamp papers used for writing documents are printed at the India Security Press, Nasik and at the National Security Press, Hyderabad and they are procured from these presses by the Treasuries and Accounts Department and distributed to the Treasuries/Sub-Treasuries through out the State. The Stamp Vendors, purchase the stamp papers from the Treasuries/Sub-Treasuries and distribute it to the Public. The Sub-Registrars are ex-officio stamp vendors and they also sell stamps. To avoid malpractices by the stamp vendors, the officials of the department conduct

8 8 periodical checks on their accounts. In the year 2003 and 2004, the accounts of the Stamp Vendors were thoroughly scrutinised and licences of the persons who made malpracrices were cancelled, due to which the number of stamp vendors reduced considerably. In order to avoid inconvenience to the public, posts of stamp vendors were created and new appointments were made in the last year. At present, there are about 3900 stamp vendors in the State. In case of non-availability of stamp papers, stamp duty can be paid by cash or demand draft. E-STAMPING Circulation of fake stamp papers pose a continuous threat to the State's economy and alternative means of collection of stamp duty were given a thought of and the Government have embarked on a method called e-stamping through which electronically generated stamp certificate shall be used for writing the documents. An agreement has been executed between the Inspector General of Registration and the Stock Holding Corporation of India Limited, the agency selected by Government of India to implement e-stamping and the system is to be launched shortly in selected offices first and then it will be spread throughout the State. It is expected that on introduction of e-stamping the revenue to the Government will be realised quickly and it will eliminate circulation of fake stamp papers. DOCUMENT WRITERS AND COPY WRITERS Document Writers assist the public in writing their documents and the copy writers in copying their documents. Document Writer's license is of three types viz., State level, District level and Sub-District level. At present there are over 7000 document writers and over 2300 copy writers in the State. SECURITY MEASURES To verify the authenticity of the stamp papers, all the registering officers have been provided with ultra-violet lamps.

9 9 Affixing of photographs of both the buyer and seller in case of sale deeds and the photograph of the presentant in case of other documents has been made mandatory. In order to differentiate between original and fake documents and certificates, holographic stickers are affixed on the registered documents and the certificates issued by the department. MISCELLANENOUS FUNCTIONS SOCIETIES REGISTRATION Registration of Societies and superintendence over them is governed by the department under the Tamil Nadu Societies Registration Act, As on , there are 1,37,355 registered societies in the State. CHITS The Chit Funds Act, 1982 and the Tamil Nadu Chit Fund Rules, 1984, govern the conduct of Chits by Chit companies in the State. The Inspector General of Registration is the Registrar of Chits. He is assisted by an Additional Registrar of Chits and Personal Assistant (Chits) in monitoring the activities of the Chits. In the zonal level, the Deputy Inspector General of Registration acts as Joint Registrar of Chits while the District Registrars act as Deputy Registrar of Chits within their jurisdiction. Also there are 47 Sub-Registrars (Chits and Societies) throughout the State to ensure the smooth conduct of chits. Three Special Chit Arbitrators dispose of the arbitration cases at Chennai (Central), Chennai (North and South) and Coimbatore. There are 2115 registered chit companies functioning in Tamil Nadu and they conduct about 33,500 chits. PARTNERSHIP FIRMS The Indian Partnership Act, 1932 provides for registration of partnership firms with the District Registrar and the registered firms have to compulsorily file declarations of satisfactory functioning every year. As on there are 4,86,885 registered firms in the State.

10 10 MARRIAGE REGISTRATION Registration of Marriages has gained significance in the modern era and it is done under different Acts according to the rituals employed in the conduct of the marriage. HINDU MARRIAGE ACT, 1955 Marriages already solemnized between the Hindus is registered under this Act by the Sub-Registrars. In deference to the directions of the Supreme Court, registration of all Hindu marriages has been made mandatory with effect from SPECIAL MARRIAGE ACT,1952 Inter-religious marriages are registered under this Act by the District Registrars/Sub- Registrars as Marriage Officers. Notice of intended marriages has to be filed with the marriage officer and on expiry of 30 days, the marriage will be solemnized, in case of nonreceipt of no objection from any quarters. In deference to the orders of Supreme Court, it is under the consideration of the government to make registration of marriages under this Act also as mandatory. INDIAN CHRISTIAN MARRIAGE ACT, 1982 Marriages between Indian Christians are solemnized by licensees under the Act and by Priests. Extracts of marriages solemnized under this Act are issued at the Office of the Inspector General of Registration. E-GOVERNANCE Introduction of IT enabled services in the department has paved way for quick and hassle free service. Out of the 568 sub-registrar offices, 450 offices have already been computerized and the remaining offices are to be computerized shortly. The services rendered in the computerized offices are as follows: (a) Scanning and storing the registered documents in compact discs so as to enable quick verification and retrieval.

11 11 (b) (c) (d) Quick issue of Encumbrance Certificates. Preparation of property valuation statement. Registration of Marriages/ Societies/ Firms/Chits. services: The website hosted by the department renders the following (a) (b) Application of Encumbrance Certificate online. Guideline values of all the areas are available in the website for verification by the public. (c) The various forms prescribed under the various Acts administered by the department are hosted. (d) Model draft deeds are available. To enhance the services rendered through computerisation, a proposal has been submitted to the 13th Finance Commission to sanction a grant of Rs.266 crores. PART II SCHEMES The following schemes have been approved under Part II Schemes for in respect of Registration Department: (1) Purchase of computers and peripherals in the Office of the Inspector General of Registration at a cost of Rs.10 lakhs (2) Purchase of computers and peripherals for the Reginet Centre at Chennai at a cost of Rs.5.89 lakhs (3) Purchase of 18 xerox machines for 10 Sub-Registrar Offices and 8 District Registrar Offices at a cost of Rs lakhs (4) Purchase of 11 fax machines to the offices of 2 District Revenue Officer(Stamps) and 9 Special Deputy Collector(Stamps) at a cost of Rs.1.40 lakhs

12 12 (5) Purchase of 250 steel tables for various offices of the department at a cost of Rs.6.25 lakhs (6) Purchase of 100 CD Racks for various offices of the department at a cost of Rs.10 lakhs (7) Purchase of 750 'S' type chairs for various offices of the department at a cost of Rs lakhs (8) Purchase of 1000 plastic chairs for various offices of the department at a cost of Rs.4 lakhs N. SURESHRAJAN MINISTER FOR TOURISM AND REGISTRATION

CHAPTER III TAXES ON MOTOR VEHICLES AND STAMP DUTY & REGISTRATION FEES

CHAPTER III TAXES ON MOTOR VEHICLES AND STAMP DUTY & REGISTRATION FEES 3.1 Results of audit Test check of records relating to taxes on motor vehicles and stamp duty and registration fees conducted during