Digital payment system to be implemented from April 1 to prevent stamp paper fraud?

Bengaluru: To curb the rising menace of counterfeit stamp papers, the Karnataka Revenue Department has decided to implement a digital payment system from April 1. Additionally, legal amendments will be introduced to curtail the special powers of sub-registrars, according to reliable sources.

Stamp papers are currently used for around 54 types of non-registration agreements, including rental and commercial lease agreements, loans, tenders, supply contracts, and various other government-related agreements. However, the Revenue Department has uncovered large-scale misuse, similar to the infamous ‘Telgi stamp paper scam’.

Counterfeiters have reportedly been producing color photocopies of stamp papers, affixing sub-registrars’ seals and signatures, and causing significant revenue losses to the state exchequer.

Annual revenue loss pegged at Rs 3,000–4,000 Crore

Audits have revealed that this malpractice has led to an estimated annual revenue loss of Rs 3,000–4,000 crore, sources said. To prevent further misuse, the Revenue Department plans to replace the traditional stamp paper system with a digital payment mechanism using challans. Revenue Minister Krishna Byre Gowda has actively reviewed this proposal, and its implementation is expected to begin on April 1.

If successful, the new system could enhance the state’s annual revenue by Rs 3,000–4,000 crore. Reports suggest that this malpractice has been ongoing since 2013, even under the BJP government. While former Revenue Minister R. Ashoka had initiated steps to address this issue, the government’s term ended before further action could be taken.

After assuming office, Minister Krishna Byre Gowda brought the issue back into focus. Investigations reportedly revealed repeated use of the same stamp paper number across multiple challans, a practice allegedly facilitated by sub-registrars, who affixed their seals and signatures, thus enabling revenue leaks. Suspicions also point to an influential network orchestrating the counterfeit printing of stamp papers.

Legal Amendments in the Budget Session?

To implement the new system, amendments to the existing Revenue Act will be required. It is gathered that the government is considering tabling the necessary legislative changes during the upcoming budget session to revoke the special powers granted to sub-registrars under Section 10A of the Registration and Stamp Department.

Notices Issued to 2,600 Contractors

According to sources, an audit has also uncovered the misuse of color photocopies of stamp papers by nearly 70,000 contractors in the ESCOM (Electricity Supply Companies) jurisdiction during agreements with the government. Over the past two months, notices have been issued to 2,600 contractors involved in such malpractices.

 Translated version of Kannada article by Raghavendra Bhat