The Kanara Chamber of Commerce and Industry (KCCI) has urged the Karnataka Government to fix a ceiling while levying stamp duty of 0.5 per cent on all equitable mortgages.
In a letter to the Karnataka Deputy Chief Minister and Finance Minister, Mr B.S. Yediyurappa, - the copies of which were released to the press on Saturday - Mr A. Srinivasa Rao, KCCI President, said that the Karnataka Government has introduced a stamp duty of 0.5 per cent on all equitable mortgages without any upper limit. "This measure of the Government to shore up additional resources will hit the industry very hard," he said.
Loans are taken from banks by providing equitable mortgage of the assets as collateral. In the past, whenever the Government had introduced such stamp duty it had a ceiling. In the absence of ceiling, the industry will end up paying very huge amount towards the stamp duty while availing itself of working capital or term loan from the banks. This may be unbearable to the small-scale industries, he said.
Considering the gravity of the issue, the Government should fix a ceiling of Rs 10,000 so as not to overburden the small-scale industries by way of this duty. The Government should exempt this stamp duty on export credits so that the competitiveness of the exporters is not weakened by this levy, Mr Rao added.