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It is almost 10 years since the Tamil Nadu government issued a gazette notification on remission of stamp duty on the documents mortgaged/ pledged by farmers and entrepreneurs of “tiny” units with banks for securing loans. The notification, which is deemed to have come into force on July 14, 2010, “continues to remain only on paper,” say industry sources.
Two years later, in August 2012, the term “tiny industries” was substituted with “micro enterprises.”
Lack of awarenessLack of awareness (about the said notification) amongst the entrepreneurs operating the micro units is understood to have resulted in its disuse.
But, that's not all. Those that brought it to the notice of this correspondent maintained that the micro units did not have the wherewithal to push their stand on this issue.
“There are associations that take up issues such as this on behalf of their members with the government. Unfortunately, this one on remission of stamp duty had gone unnoticed. Now, the units are under pressure, particularly after the rollout of GST; so this issue has been put on the back burner,” said an industry source, who incidentally is into manufacture of electric motors and air compressors, preferring anonymity
“The stamp duty is half per cent of the loan amount subject to a maximum of ₹25,000. We don’t get this waiver. Apart from the stamp duty, the micro units have to pay a fee – up to a maximum of ₹5,000 or one per cent of the loan amount and a fixed fee of ₹100, totalling ₹5,100.”
Registered mortgageHe pointed out that banks extend finance only when a charge is created on the property with the registration department through a formal process by transferring the interest on the property to the lender as security. In other words, by creating a registered mortgage.
“When the requirement is urgent, it is difficult to complete the registration process within the stipulated time. Over and above the stamp duty and fee, we have to pay for documentation work,” the source said, urging the need for enforcing the said notification.
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