Revenue stamps have been used by India since the days of the British. It is more of a mechanism of generation of revenue for the Government. For instance,as per the Indian Stamp Act of 1899, section 2(23), a revenue stamp has to be affixed on any transaction more that Rs 5000.00 (payment, due note, receipt etc). Imagine the number of such transactions in our country, the revenue generated would run in crores.
Revenue stamps are used for a wide range of services, court fees, tax, share transfer, consular fees, insurance etc.
In simple terms, any payment between two people for a service holds more value if the receipt has a revenue stamp on it and the signature is across it. At times of shortage, the company puts a seal"Revenue stamp not affixed because of no supply/stock'
A cancellation of the revenue stamp can be by means of a cross drawn on it or a hole punched out or a seal of the office/company.