The idea of stamp duty was established by the Britishers in 1899 and was pertinent for all property transactions.As per Black’s Law Dictionary, stamp duty implies an extra charge collected on certain legal documents by buying a stamp to be put on said document. Agreements being the spirit and heart of businesses should be enforceable by law. They will be enforceable by law if they fulfill the provisions given under the Indian Stamp Act, 1899 read with the Registration Act, 1908. Consequently, they ought to be appropriately stamped for being valid as per the law. As per the Indian Stamp Act, 1889, stamp duty should be paid to record and monitor each and every transaction. Thus, stamp duty is like verification that the agreement has occurred between the parties. It’s a legitimate substance that is valid as proof in case of conflicts in a court of law. Stamp duty in India is administered by two enactments, i.e a Stamp Act enacted by the Parliament and a Stamp Act enacted by the state legislature. As per Article 246 read with Schedule VII of the Indian constitution, Parliament can legislate laws relating to rates of stamp duty of bill of exchange, checks, promissory notes, bill of filling, letter of credits, policies of protection, transfer of shares, debentures, intermediaries, and receipts while state governing body or the state legislature can administer on the issues which are not mentioned above. 
When is a Stamp Duty Payable
The Stamp duty is payable regardless of the kind of property purchased. It is payable before execution of the document or on the day of execution of the document or after the execution of the document. Here the term ‘Execution’ means when the buyer and seller sign the document that results in a transfer of property. 
Liablity of Paying Stamp Duty in an Agreement
The liability can be imposed by agreement to both of the parties of the agreement for payment of the stamp duty. Section 29 of the parliament legislation gives the power to the parties of agreement to choose who among the parties of the contract will be liable to pay the stamp duty imposed on the concerned arrangement, which, without an agreement, imposes on specific people the liability of paying stamp duty. Additionally, Section 30 of the state lawmaking body or the state legislature gives a choice to the parties of the agreement to choose who among the parties of the arrangement will liable to pay the stamp duty imposed on the concerned agreement and which without any such agreement, impose on a specific party the liability of paying the stamp duty. It is legitimate to pass the burden of paying the stamp duty on the party who is paying the consideration under the agreement, as stamp duty is the expense for the subject of the agreement.
Stamping on Electronic Contracts
Seeing the development, prospects, and blast of business in India, the transaction by means of electronic contracts has been on a constant rise. As the payment of stamp duty has gone online and e-stamp papers are accessible, it has become necessary to impose stamp duty on e-contracts also. An e-contract is needed to be stamped as per the State-specific stamp laws. Section 3 of the Indian Stamp Act and the stamp enactment of a few different States in India indicate that an instrument to be chargeable with stamp duty should be “executed”. The term ‘execution’ in the previously mentioned Act is used to signify ‘signed’ and ‘signature’.
Section 3 of the Maharashtra Stamp Act, provides that each and every instrument states in Schedule I to the Act is chargeable with Stamp duty. This suggests that stamp duty is additionally payable on agreements entered in electronic form if such instrument is recorded in Schedule I.  The Maharashtra E—Registration and E-Filing Rules, 2013 facilitates online payment of stamp duty and enlistment charges. The Rules also make appending of an electronic signature or biometric thumbprint necessary; thereby further giving acknowledgment and legitimate validity to e-contracts.
While there have been huge steps in bringing the lawful framework with new innovation and resultant transactions through E-Contracts, it can be very well said that the lawful setup or framework relating to E-Contracts in India is still in the incipient stages when compared with different nations. Troubles are experienced when courts refuse to give terms of such e-contracts including arbitration agreements contained in that. In the latest Bombay High Court order, the Hon\’ble Bombay High Court held that between time measures under Section 9 of the Arbitration and conciliation Act,1996 can\’t be allowed if the agreement, from which the dispute emerges, is chargeable with stamp duty however is unstamped or insufficiently stamped. When all the laws are applicable and interpreted in conjunction with one another it can be implied that e-contracts being valid contracts are also liable for the stamp duty at the time of execution.
The stamp duty law varies from state to state. The stamp duty works almost like a piece of evidence for the deal closure and that it has occurred between the two contracting parties. It is a legal establishment that is valid in a court of law as a piece of evidence in the case of conflicts. The physical transfer of a property is not considered valid in the eyes of the law. To make the transaction of such property valid under the law, the buyer must pay stamp duty, as evidence of the purchase that has occurred between the parties to the agreement. Therefore, Stamp Duty is the government tax paid at the time of property agreement and makes the transfer certificate hold good in a court of law. The non-payment of stamp duty or counterfeiting of stamps is a criminal offense under the Indian Penal Code.
This article is authored by Jyotika Saroha, Student at Dr. B. R. Ambedkar National Law University, Sonipat
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