The decision of the Maharash-tra government to bring all sectors, including the priority sector, within the purview of the amended Stamp Duty Act has come in for crticism from exporters.
All India Garment Exporters & Manufacturers Association president Madan Jain said instead of providing incentives and facilities for exports, the state government has imposed a stamp duty on agreements meant for export finance.
Besides, the government has also failed miserably to consider exports as a national priority. He added that Maharashtra was the only state to impose stamp duty on agreements for export finance.
Jain said every exporter depends on commercial banks which provide export finance against letters of credit (LoC).
An exporter has to obtain sanctions of limit by their bankers to the extent of their anticipated financial requirements during the year and as such separate agreement for packing credit limits, bill purchase limits and cash credit or overdraft facilities are signed after offering collateral security by putting lien or hypothecation of immovable properties.
All such different agreements relating to sanction of limits for advancing finance which are repayable on demand or more than three months attract stamp duty according to recent amendments to the extent of 2 per cent of the loan amount or Rs 2,00,,000 whichever is lower, irrespective of whether the exporter utilises the limit or not.
Jain revealed that to add this, there are glaring anomalies in the stamp duty payable by the exporters
To avail of packing credit, a separate agreement is signed attracting a stamp duty of 2 per cent or Rs 2,00,000.
To pay off the packing credit loan, another loan agreement is signed which is called Bill Purchase limit. The amount realised from export shipments are transfered from the bill purchase account to pay off packing credit loan, which also attract same amount of stamp duty.
Cash credit/overdraft facility in thye current account which attracts separate stamp duty.
