Q.
With reference to the Stamp Act 1949 (As amended),
(a) Explain the procedure for objection by the purchaser who is dissatisfied with the duty imposed by the Collector of Stamp Duty. (15 marks)
(b) Explain with an example each, the Initial Duty and Additional Duty. (10 marks)
(25 marks, 2016 Q6)
A.
a) This is a common question on Stamp Duty appeal.
2011 Q4 Mrs Suria & Mr Wong
2012 Q1
2013 Q7b Mr Eric
2014 Q2 Ahmad & Salamah
b) Initial Duty & Additional Duty
Read about 'Advance Duty' here.
Payment of stamp duty using private valuation — effective 1 January 2008
Effective 1 January 2008, private valuation by a practicing valuer is accepted for the determination of an “initial duty” payable in order to expedite the transfer of real property prior to the official JPPH valuation being issued.
The payment for the initial duty must be made together with a bank guarantee valid for a period of not less than 6 months. The amount of the bank guarantee is computed based on the difference in stamp duties between the JPPH valuation and the private valuation, with the JPPH valuation being deemed to be 35% higher than the private valuation.
The amount of the bank guarantee is computed based on the following formula:
Bank guarantee amount = A − B
Where A is the duty chargeable on such instrument based on the value of immovable property, where the value is ascertained in accordance with the following formula:
Y × 100/65
Where Y is the market value of such property as submitted by that person B is the amount of stamp duty chargeable on such instrument based on the market value submitted by that person.
If, based on the subsequent JPPH valuation, the proper stamp duty is higher than the initial duty paid, the Collector may, within 3 months after payment of the initial duty, issue an additional assessment for the additional duty payable.
Where the additional duty is not paid within 30 days of the service of the additional assessment, the Collector shall call upon the bank guarantee. If the bank guarantee amount is insufficient, the remaining duty unpaid shall be increased by 10%. In addition, where the proper duty chargeable exceeds the sum of the initial duty plus the bank guarantee (“the amount”) by more than 30% of the proper amount of duty chargeable, the difference between the amount and 30% of the proper duty chargeable shall be increased by 10% of the difference. An appeal against the additional assessment may be made within 30 days from the date of the additional assessment.
Ref:
http://www.mia.org.my/v1/downloads/resources/publications/budget/2017/C/C2.pdf
From the Stamp Act, 1949 verbatim:
Mode of adjudication as to proper stamp
36. (1) All instruments chargeable with duty and executed by any person in Malaysia (except an instrument which by virtue of section 47 cannot be stamped after execution) shall be brought to the Collector and the Collector shall assess the duty, if any, with which in his judgment the instrument is chargeable.
Initial duty
36A.
(1) Notwithstanding section 36 but subject to section 36B, the Collector may, on an application made by any person in respect of an instrument for the transfer of an immovable property, assess the initial duty for which the instrument is chargeable.
(2) The application made under subsection (1) shall contain particulars or evidence deemed necessary to prove the facts affecting the liability of the instrument to duty and any valuation report, prepared by a person privately practising as a valuer, on the market value of the immovable property shall for the purposes of this section be sufficient evidence for the Collector to make an assessment on the initial duty for which the instrument is chargeable.
(3) For the purposes of this section, a person shall—
- (a) pay a fee of ten ringgit; and
- (b) furnish in a form of a bank guarantee payable to the Collector, as security for payment of further duty chargeable on the instrument, if any, valid for a period of not less than six months, of which the value of the bank guarantee shall be determined in accordance with the following formula:
where A is the duty chargeable on such instrument based on the value of immoveable property where the value is ascertained in accordance with the following formula:
- where Y is the market value of such property as submitted by that person;
- B is the amount of duty chargeable on such instrument based on the market value submitted by that person.
Additional duty
36B.
(1) Where section 36A applies and it appears to the Collector that based on the market value of the property as ascertained by a valuer employed by the Government, the proper amount of duty chargeable on the instrument is higher than the initial duty paid, he may within three months after the payment of the initial duty make an additional assessment on a person liable to pay such duty in the additional amount of duty chargeable.
(1A) Where section 36AA applies and it appears to the Collector that based on the market value of the immovable property as ascertained by the valuer employed by the Government, the proper amount of duty chargeable on the instrument is higher than the advance duty paid, he may make an additional assessment on the person liable to pay such duty in the additional amount of duty chargeable.
(2) As soon as may be after the additional assessment has been made under subsection (1) or (1A) the Collector shall cause a notice of additional assessment to be served on the person liable to pay duty in respect of such assessment.
(3) A notice of additional assessment shall be in appropriate form and shall indicate in addition to any other material included therein—
- (a) the proper amount of duty chargeable, the initial duty or advance duty paid and amount of additional duty chargeable on the instrument;
- (b) the place at which payment is to be made;
- (c) the increased sum imposed under subsection (6); and
- (d) any right of appeal which may exist under this Act.
(4) The duty chargeable under an assessment shall be due and payable on the service of the notice of additional assessment to the person liable to pay the duty.
Ref:
S.36, 36A & 36B Stamp Act 1949.