Earlier, the export usance bills (also falling in the category of a bill exchange) beyond 90 days were subject to Stamp Duty which was implemented by the Public Sector Banks and others as per the Indian Stamp Act, 1899, uniformly in all parts of the country, at the following stab rates:
i) Upto 90 days usance bill, there is no foreign bill stamp duty required.
ii) Above 90 days upto 180 days, there are two slabs. Above 90 days and upto 180 days, if the bill is negotiated by bank, foreign bill stamp duty @ Re.1 per Rs.1000/- has to be affixed on the back of the bill. If the bill is drawn for more than 90 days and sent on collection basis, stamps @ Rs.2.50 per Rs.1000/- have to be affixed on the back of the bill. Thus burdening exports with additional average cost of 0.2%.
However, the matter was taken up by FIEO with Ministry of Finance / RBI / IBA several times and finally a waiver was granted for usance bills of exchange. Copy of the circular is attached herewith.