The Maharashtra government has overhauled stamp duty rules on bank guarantees, creating a separate, independent category under the Maharashtra Stamp Act (1958) through an amendment unanimously passed in the state assembly on Tuesday, 7 July. The change is expected to deliver significant cost relief to businesses engaged in commercial transactions, government contracts, and infrastructure projects across the state.

What Changed and Why It Matters

Until now, Schedule-I of the Maharashtra Stamp Act had no dedicated provision for bank guarantees or financial guarantees. These instruments were classified under Article 54 as 'security bonds', attracting the full stamp duty applicable to that category.

The most consequential problem, according to Revenue Minister Chandrashekhar Bawankule, who tabled the bill, was the renewal clause: every time a bank guarantee was renewed or its validity extended — even when the guaranteed amount remained unchanged — the full stamp duty was levied afresh, as though a new instrument had been created. This effectively doubled or multiplied the cost burden over the life of long-term contracts.

What the Amendment Does

The amendment inserts a 'separate article' into the Act specifically for bank and financial guarantee instruments. Bawankule stated that this change will bring transparency to the renewal process and provide significant financial relief to trade and industry. He also noted that by lowering the compliance cost of using bank guarantees, the reform is expected to increase their adoption in commercial dealings — which, in turn, could boost government revenue through higher transaction volumes even at rationalised duty rates.

BMC vs National Sports Club of India: Dues Dispute

Separately, Minister Shambhuraj Desai announced in the Legislative Council on the same day that a meeting will be convened within 15 days after the assembly session to address outstanding dues owed to the Brihanmumbai Municipal Corporation (BMC) by the National Sports Club of India in Worli. The issue was raised by Member Prasad Lad, with Member Anil Parab also participating in the discussion.

Desai assured the House that recommendations of the Public Accounts Committee (PAC) will be strictly followed, and that a dedicated committee will be set up to investigate the club's operations and financial transactions.

BMC Recovery and Pending Action

Minister of State for Urban Development Madhuri Misal informed the House that the BMC has already recovered ₹66 crore from the institution, along with an additional ₹11 crore related to unauthorised construction. The remaining dues are being recovered in phased instalments.

Misal directed that the institution's transactions be audited and a comprehensive report submitted within three months. Stringent action, she assured, will follow based on both the PAC's recommendations and the findings of the forthcoming inquiry report.

What Comes Next

With the stamp duty amendment now passed, the state government is expected to notify the revised schedule, after which businesses can begin availing the rationalised duty structure on bank guarantee renewals. On the BMC front, the formation of the dedicated inquiry committee and the 15-day meeting timeline will be closely watched by civic accountability advocates.