Instruments Compulsorily Chargeable

Section 3 of Stamp Act 1899 is a charging section and it lays down that an instrument must be charged with the duty or not schedule I along with section 3 provides a list of instruments chargeable with stamp duty along with some exceptions.

  Stamp duty is a duty payable on the document provided in 1^st schedule, so that the document may be recognized by law and may become admissible in evidence where required to prove or disprove any fact in issue. Stamp duty is always paid on instrument not on transactions. Every instrument is chargeable subject to some exceptions. Section 3 provides three categories of instruments which are chargeable with stamp duty discussed as follow. Any instrument which is mentioned in schedule I and I(A) are chargeable with stamp duty compulsorily.

  

a- Instrument must be executed in Pakistan

         b- Instrument not executed before 1 day of July 1899

         c- Instrument not exempted by law 

Every instrument which is otherwise a foreign instrument but negotiated in Pakistan shall be compulsorily chargeable. Any foreign instrument if concerned with some property situated in Pakistan is to be charged with stamp duty compulsorily. Following are the documents exempted to be stamped. Revenue is collected for state and state government need not to pay stamp duty. Any instrument which is made for sale, transfer or any disposition of a ship or vessel shall be exempted with stamp duty.

 Any instrument made in favor of local authority is exempted from payment of stamp duty. If provincial government has reduced stamp duty on any instrument or a class of instrument than such instrument shall not be chargeable with duty All the documents exempted by schedule are exempted from stamp duty as well. An instrument exempted under other acts shall also be exempted under Stamp Act. It is a substantive law because it gives the principle of charge ability with stamp duty.