Under the Indian Constitution, stamp duties and registration fees are divided into two main categories based on governance: the Union List and the State List.
Responsibility: Central Government
Coverage: This includes bills of exchange, cheques, promissory notes, letters of credit, insurance policies, share transfers, and debentures.
Key Feature: Uniform rates are applied across all states, ensuring consistency in taxation.
Revenue Collection: Although the Central Government sets the rates, the collection is managed by State Governments.
Revenue Allocation: The revenue generated is retained by State Governments.
Responsibility: State Governments
Coverage: This list covers various items, most commonly property transfers.
Key Feature: State Governments have exclusive authority to determine stamp duties for the instruments listed under this category.
Understanding these distinctions is crucial for grasping the framework of taxation in India, particularly for students preparing for competitive exams.
Q1. What are the main differences between the Union and State List regarding stamp duties?
Answer: The Union List is governed by the Central Government with uniform rates, while the State List allows State Governments to set their own rates for various instruments, mainly property transfers.
Q2. Who collects stamp duties for instruments listed under the Union List?
Answer: Although the Central Government sets the rates for Union List instruments, the collection of stamp duties is managed by State Governments.
Q3. Can State Governments change the stamp duty rates for properties?
Answer: Yes, State Governments have the exclusive power to determine stamp duties for the instruments listed under the State List, including property transfers.
Q4. Are the revenues from stamp duties retained by the Central Government?
Answer: No, the revenues from stamp duties collected by State Governments are retained by them, regardless of whether the duties fall under the Union or State List.
Q5. Why is understanding stamp duties important for competitive exams?
Answer: Knowledge of stamp duties and registration fees is essential for students preparing for exams like UPSC and SSC, as it forms part of the broader understanding of taxation in India.
Question 1: Who is responsible for setting stamp duties under the Union List?
A) State Governments
B) Central Government
C) Local Authorities
D) Private Entities
Correct Answer: B
Question 2: Which of the following is NOT covered under the Union List stamp duties?
A) Cheques
B) Property Transfers
C) Promissory Notes
D) Insurance Policies
Correct Answer: B
Question 3: What is the key feature of stamp duties under the State List?
A) Uniform rates across states
B) Exclusive power to set rates
C) Collection by Central Government
D) Fixed rates for all items
Correct Answer: B
Question 4: Who manages the collection of stamp duties listed under the Union List?
A) Central Government
B) State Governments
C) Municipal Corporations
D) District Courts
Correct Answer: B
Question 5: What happens to the revenues generated from stamp duties under the State List?
A) Shared with Central Government
B) Retained by State Governments
C) Donated to NGOs
D) Used for federal projects
Correct Answer: B
Question 6: Which of the following items is included in the Union List stamp duties?
A) Property Transfers
B) Share Transfers
C) Land Deeds
D) Rental Agreements
Correct Answer: B
Question 7: Are the rates for stamp duties under the Union List consistent across states?
A) Yes
B) No
C) Only in major states
D) Varies by region
Correct Answer: A
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