Duty Payable by Whom

In one line

Unless the parties have agreed otherwise, the Act says which of them pays: the buyer on a conveyance, the tenant on a lease, the landlord on the counterpart, both equally on an exchange, the sharers rateably on a partition, and in every other case the person executing the document.

In exam wording: section 30 provides that, in the absence of an agreement to the contrary, the expense of providing the proper stamp shall be borne as the section directs.

The section opens with a default

The words "in the absence of an agreement to the contrary" govern the whole section. Section 30 is a default rule, not a mandatory allocation, and parties are free to agree that the other side will pay. What they cannot do is agree that nobody will pay: the Government's claim to the duty is unaffected by their bargain, which only decides who bears the expense as between themselves.

The allocation

(a) The person drawing, making or executing the instrument, in the case of the instruments the section lists by their Schedule I articles. Those are principally bonds and security instruments: an administration bond, an agreement relating to deposit of title-deeds, pawn or pledge, a bond, a bottomry bond, a customs bond, a further charge, an indemnity bond, a mortgage deed, a release, a respondentia bond, a security-bond or mortgage-deed, a settlement, and transfers of debentures and of interests secured by a bond, mortgage deed or policy of insurance.

The common thread is that these are documents by which one person assumes an obligation in favour of another, so the person undertaking it provides the stamp.

(b) The grantee, in the case of a conveyance, including a re-conveyance of mortgaged property; and the lessee or intended lessee, in the case of a lease or agreement to lease.

This is the practical rule that answers most questions: on a sale, the buyer pays; on a lease, the tenant pays.

(c) The lessor, in the case of a counterpart of a lease. The counterpart is the copy the landlord keeps, so he provides its stamp.

(d) The parties in equal shares, in the case of an instrument of exchange. Each gives and each receives, so the burden is split.

(e) The purchaser, in the case of a certificate of sale of the property to which the certificate relates.

(f) The parties in proportion to their respective shares in the whole property partitioned, in the case of an instrument of partition; and where the partition is made in execution of an order of a Revenue authority, Civil Court or arbitrator, in such proportion as that authority, Court or arbitrator directs.