18. But the two states of Maharashtra and Gujarat have specific provisions stipulating that if a stamp is not used or returned within six months from the date of issue, it will be considered expired. Section 52B(b) of the MSA Act and Section 52C of the Mumbai Stamp (Gujarat Amendment) Act 2016 state that a stamp purchased within six months and is not used or claimed for certificates will be considered invalid. However, trademarks purchased and not used for the intended purpose are entitled to a refund after deduction of certain duties if they are subject to reimbursement within six months of the date of purchase and if the conditions set out in Chapter V of the AMM are met. (11) If the stamp is unused or scrambled, a person may apply for a refund of stamp duty. To this end, the complaint must be sent to the stamp collector within 6 months from the date of purchase of the stamps (Article 47 of the MSA). 10. It is important to note that, although stamp duty (a) is levied by the buyer in the event of the sale of securities through the exchange; (b) by the seller, in the case of the sale of securities, other than through a stock exchange or depositary; (c) by the seller where the security is transferred by a depositary; The amendment does not alter the enabling provision in section 29 of the Act, which allows the parties to a transaction to agree on cost-sharing in accordance with their business agreement. 16.
Pursuant to section 54 of the ISA Act – If a person is in possession of one or more stamps that have not been damaged or rendered unfit or unusable for the purpose for which they are intended, but for which it has no direct use, the collector must return to that person the value of such silver stamp or stamps, minus ten naye paise for each rupee or part of a rupee. if that person presents the same thing to cancel it and proves to the satisfaction of the collector: validity of the stamp document and provisions for reimbursement: (4) This is the act subject to the collection of stamp duty and not the transaction itself. [supra- 3] Syndicated loans are quite common in credit transactions. For large loans, a single bank may not be able to grant the loan itself. Therefore, the loan is syndicated in such a way that two or more banks agree to lend to a borrower on common terms governed by a single agreement between all parties. Similarly, a joint securities trustee is appointed to receive and hold the security provided by the borrower for the benefit of the joint lenders. The issuance of stamp duty on a mortgage granted by a borrower to a securities trustee in favour of syndicated lenders was raised in Chief Controlling Revenue Authority v. Coastal Gujarat Power Ltd. et al.6 The Honourable Supreme Court has ruled that a mortgage deed with a security trustee to secure loans from multiple banks is treated as a separate transaction and is subject to stamp duty as if separate mortgage deeds had been registered for each of those banks/lenders. The term “award” used in Annex I does not include foreign arbitral awards and, therefore, no stamp duty is payable on the same Shriram EPC Ltd. v.
Rioglass Solar SA (2018) 18 SCC 313:2018 CSC Online SC 1471 Stamp duty is an ad valorem tax payable on the value of an instrument used in various commercial or other transactions. The Indian Stamp Act, 1899 (the “Act”), enacted to require and provide for the imposition of an appropriate stamp duty on an instrument, is based on the imputability of the instrument rather than on transactions, notwithstanding the fact that different instruments may relate to a single transaction.2 In addition, under the Indian Contract Act of 1872, an oral contract, to which the parties wish to be bound, valid and enforceable.4 However, there are certain circumstances in which the law requires contracts to be in writing and recorded (for example, 11-month leases or a vacation and license agreement). This is particularly relevant in the context of electronic contracting, where there are many difficulties in stamping an electronic contract. (More information can be found here) In the case of depositary transactions, the amendment introduces the concept of distribution list, which is a list containing details of the allocation of securities notified by the issuer to the depositary. After the amendment, this distribution list is deemed to be the principal instrument on which stamp duty is payable and no stamp duty is levied on other instruments related to the same sale or purchase of securities.13 The custodian is required to collect stamp duty on behalf of the provincial government from the issuer of securities. before executing a transaction in the account deposit system. Stamp duty is levied on the total market value of the securities included in the allocation list.14In the specific case of an open offer, an offer to sell or a private placement made through a depositary, stamp duty is levied by the offeror on the market value of the security acquired or disposed of; at the offer price once the offer has been successfully completed.15 4. In the case of a sale, mortgage or settlement, where there are several instruments for a transaction, stamp duty is payable on only one instrument. Other instruments are subject to a nominal stamp duty of the rupee (section 4(1) of the International Search Act). (ii) provide for a centralized collection mechanism whereby stamp duty is collected in one place by an entity (i.e. through exchanges or clearing houses licensed by the exchange or depositories) on an instrument.4 2.
Section 2 (26) of the Act: “Stamp” means any mark, seal or endorsement of an authority or person duly authorized by the State Government, including an adhesive or stamp for the purposes of tax imposed under this Act. The amendment also subjects all debt securities to stamp duty, unlike the Act,21 which only required marketable securities.22 This would increase transaction costs for private companies to issue unlisted bonds. Section 17 of the MSA states that all documents subject to the forfeiture obligation in Maharashtra and executed in Maharashtra must be stamped before or at the time of execution, or immediately after or on the working day following the date of execution. In addition, according to Article 18 of the AMM, only instruments exported outside Maharashtra may be stamped within three months of receipt in India. In the current system of collection and collection, one of the main concerns was the multiple stamp duty charges levied by different State Governments on the same instrument. In order to avoid this, the amendment provides for a uniform procedure whereby stamp duty must be collected, collected and withheld by the governments of the respective States. The amendment stipulates that the exchange (or a clearing house authorized by it) or custodian must remit stamp duty to the government of the state in which the buyer resides within three weeks of the end of each month and if the buyer is located outside India. to the government of the State with the seat of the trading member or broker of such a buyer and, in the absence of such a trading member of the buyer, to the government of the State with the seat of the depositary participant (as defined in section 2(g) of the Depositaries Act 1996).24 has. Establishment of a centralised zero-evasion collection mechanism, whereby stamp duty is collected through an agency, collected at a place and on an instrument for transactions in the securities market. As described in question 3 of our previous blog, there are several ways to pay stamp duty. These modes were developed after the famous Telgi scam and made strict in their application5.
The central government became vigilant after this scam and introduced some changes, such as the Indian security press now having to number the mandatory stamp papers, watermark in the stamp paper and the name of the state from which the stamp paper is issued or distributed by the government must be printed on the stamp paper. Any delay or underpayment of stamp duty will result in a heavy penalty. 1. The stamp duty laws have three objectives: Lawyers Kirit Hakani and Niyati Mankad (Hakani) discussed at length the stamp law in force in the state of Maharashtra. The ld. The authors also looked at the changes introduced into the central law by the 2019 and 2020 Finance Laws, which introduced a new system for collecting stamp duty on securities and removed the confusion and litigation that had prevailed for many years. The easing of restrictions by the state government due to the COVID-19 pandemic was also discussed. The Stamp Duty Act on gifts to relatives, as it prevails in Gujarat, Tamil Nadu and Karnataka, has also been clarified (20) timesofindia.indiatimes.com/articleshow/75821306.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst – The above-mentioned documents are subject to a duty at the rate set out in Annex I and this document need not be stamped 12.
